Bitcoin miners overwhelmed after electricity theft, exchange ‘shutdown’ scam: Asia Express

We round up the weekly news from across Asia, highlighting the most important industry trends.

Power struggle with Southeast Asia’s Bitcoin miners

Southeast Asia has become a hotbed of Bitcoin mining following China’s massive crackdown in 2021. Authorities across the region are now battling a surge in electricity theft used to fuel these mining activities.

Malaysian authorities arrested seven people this week for allegedly mining bitcoin illegally using stolen electricity, according to Malaysian state-run news agency Bernama.

Police seized 52 pieces of mining equipment along with electronic devices and several vehicles worth about 250,000 ringgit (US$57,000).

But that’s just the tip of the iceberg of the electricity theft and Bitcoin mining problem happening across tropical Asia.

In July, Malaysia’s deputy energy minister reported that illegal cryptocurrency miners stole about $723 million worth of electricity between 2018 and 2023.

And Malaysian authorities are quite the showman when it comes to dealing with confiscated mining equipment.

They recently used steamrollers to destroy 1,000 Bitcoin mining rigs worth $452,000. This stunt was similar to the one in 2021 when $1.25 million worth of mining equipment was destroyed.

Similar incidents have been reported across Southeast Asia after miners fled from China and sought refuge in neighboring countries.

In Thailand, mining equipment worth more than $5.8 million was seized in April in an investigation into electricity theft, according to local media. The raids were carried out after authorities discovered unusually high electricity consumption in certain areas.

Indonesia is also grappling with this problem. In December 2023, Indonesian police shut down 10 mines for allegedly stealing $1 million worth of electricity.

In Laos, the state energy distributor cut off electricity to cryptocurrency miners earlier this year. The reason for the cut was a shortage of local energy production, exacerbated by a drought in the first half of 2023. However, one employee said one of the reasons for the cut was that miners were unable to pay their bills.

MGPerak: Police Rufus Bitcoin Equipment, Worth Nearly RM2 Million

PARIT – Perak Regional Police Division (IPD) on Monday destroyed 985 pieces of equipment used in Bitcoin mining activities worth RM1.98 million.

Central Perak District Police Chief,… pic.twitter.com/hDSzN8aGNa

— Malaysia Gazette (@MalaysiaGazette) August 19, 2024

NFTs are creating cultural change in China

BeiOne Digital, a state-owned subsidiary of Beijing Cultural Investment and Development Group, and Hong Kong-based JME Capital announced a collaboration on August 21 that they are calling it the “era of NFT 2.0.”

The initiative aims to digitize and globally distribute some of China’s most recognized cultural assets using non-fungible token technology.

Their portfolio includes valuable assets such as the Qingming Shanghe Dao, the Twelve Zodiac Head Statues, Wutai Mountain, and the Heavenly Temple.

These assets will be converted into digital collectibles, with plans to launch the NFTs in Hong Kong, a city widely seen as an economic gateway to the Chinese market.

While the Chinese government has taken a cool stance on cryptocurrencies, the Chinese people’s enthusiasm for blockchain technology remains unchanged.

Despite speculations recently raised by Tron’s Justin Sun tweeting that China may reconsider its cryptocurrency ban, China remains steadfast in its restrictive policies.

Recently, China’s Supreme Court officially classified cryptocurrency trading as a means of money laundering.

Meanwhile, the global NFT market is in a slump. Some of the world’s most valuable NFTs have plummeted in price, according to CoinGecko, with the so-called blue chip Bored Ape Yacht Club’s floor price down more than 91%.

Similarly, CryptoPunks saw a 78% decline.

Latest Korean Exchange Closure Scam

South Korea’s Financial Supervisory Service (FSS) has issued a consumer warning following a surge in scams impersonating cryptocurrency exchanges that are on the brink of closure.

The scammers are sending messages to victims urging them to withdraw their cryptocurrencies from the so-called dormant accounts of the exchange. The messages warn that the assets will be “burned” due to the closure of the business. However, these assets are not real.

Victims are then directed to a link that links to a fake customer support group chat, where accomplices share successful withdrawal stories to build the victim’s trust.

The scammers further trick victims by presenting fake screenshots that appear to show large cryptocurrency balances ready for withdrawal. They then request bank transfers for fees and taxes, or even request additional cryptocurrency transfers.

These scams are especially convincing given South Korea’s current regulatory environment.

On August 22, financial authorities began on-site inspections of cryptocurrency exchanges under the country’s new cryptocurrency law that came into effect on July 19. These inspections are part of a broader initiative to crack down on suspicious cryptocurrency transactions.

Elsewhere in Asia, crypto exchanges are also facing increased regulatory oversight. According to a Bloomberg report, 11 crypto exchanges awaiting formal licensing in Hong Kong have been hit with delays after the Securities and Futures Commission found unsatisfactory practices during on-site inspections.

Metaplanet, Bitcoin fever continues

Japanese investment firm MetaPlanet is living up to its nickname “Asia’s MicroStrategy” as it buys another round of Bitcoin.

On August 20, the company purchased 57,273 bitcoins for 500 million yen ($3.42 million), increasing its holdings to 360,368.

The purchase follows Tokyo-based Bitcoinholic’s announcement of a 1 billion yen shareholder loan in early August.

MetaPlanet’s Bitcoin holdings are still tiny compared to those of MicroStrategy, an American investment firm that holds 226,331 bitcoins.

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Yoon Yohan

Yohan Yoon is a multimedia journalist covering blockchain since 2017. He has contributed as an editor to Forkast, a cryptocurrency media outlet, and has covered Asian technology stories as an assistant reporter for Bloomberg BNA and Forbes. In his free time, he enjoys cooking and experimenting with new recipes.