Crypto Crime: $15B Heist & Global Crisis ⚡💰

World News

As illegal cryptocurrency mining and related scams continue to spread across Southeast Asia, governments are now realizing that seemingly “cheap” electricity can translate into billion-dollar losses, significantly strain power grids, and contribute to rising climate costs. Malaysia’s national utility firm, Tenaga Nasional, incurred losses exceeding $1 billion (€860 million) between 2020 and August of this year due to illegal power usage by cryptocurrency miners, according to a statement released by the country’s Energy Ministry earlier this month. In response, Malaysian police have intensified a crackdown, conducting multiple raids on suspected sites since January as part of a multi-agency operation involving energy regulators and anti-graft authorities aimed at combating electricity theft connected to crypto mining activities. Tenaga Nasional reported to parliament this month that it had identified 13,827 establishments suspected of operating as illegal crypto mining sites. “These activities not only threaten user safety but also jeopardize the nation’s economic stability, increase public safety risks, and pose a serious threat to the national energy supply system,” the public utility stated. Notably, China previously dominated the global landscape of cryptocurrency mining, an energy-intensive process utilizing powerful computers to solve complex mathematical puzzles and validate cryptocurrency transactions, earning rewards in the form of new digital coins. Given the proliferation of these illicit activities across Southeast Asia, governments are increasingly recognizing the significant financial and operational consequences associated with “cheap” power utilized for bitcoin.

Thailand’s Central Investigation Bureau seized dozens of illegal cryptocurrency mining machines, hidden within abandoned houses near Bangkok, as rising climate costs continue to escalate. Authorities estimate the operation resulted in approximately $327,000 in stolen electricity from the state utility. Malaysia’s Energy Transition and Water Transformation Ministry has established a multi-agency committee to tackle the expanding problem of electricity theft directly linked to cryptocurrency mining. Officials believe the documented $1 billion loss represents a conservative estimate; actual losses are likely significantly higher, encompassing undetected mining sites and potentially long-term damage to transformers and cables. Governments are becoming increasingly concerned about the utilization of limited, largely fossil-fuel based power sources for illicit bitcoin mining. Furthermore, the illicit cyber-fraud industry in the Mekong region generates revenues equivalent to roughly a third to almost half of the combined formal economies of Cambodia, Laos, and Myanmar. A recent United Nations Office on Drugs and Crime report indicated that transnational criminal groups from Southeast Asia are rapidly expanding their operations globally, leveraging illegal crypto mining as a “powerful tool” for laundering billions in illicit proceeds. Earlier this month, the U.S. government announced the creation of a new Scam Center Strike Force, aimed at combating the surge in cryptocurrency-investment fraud perpetrated by these transnational criminal organizations.

Organizations operating out of Southeast Asia are estimated to be defrauding Americans of nearly $10 billion annually, according to a statement by the Justice Department. The U.S. has already seized and forfeited over $400 million in cryptocurrency, and is pursuing forfeiture proceedings for an additional $80 million, intended to be returned to victims. These actions stem from the operation of “scam factory” compounds across Southeast Asia, allegedly staffed by individuals subjected to forced labor, and the laundering of illicit proceeds through casinos, real estate, and cryptocurrencies. The U.S. and Britain have imposed landmark sanctions on the Cambodian conglomerate Prince Group, accusing it of operating these forced-labor scam compounds. U.S. authorities seized approximately $15 billion in bitcoin from Chen Zhi, a naturalized Cambodian and the CEO of Prince Group, in what prosecutors described as the largest-ever forfeiture action. Chen Zhi has also been indicted on charges of wire fraud and money laundering.