Bitcoin Miners Hit Hard by Electricity Theft and Exchange ‘Closure’ Scam: Asia Express

This is a weekly summary of significant events in the Asian cryptocurrency landscape.

Bitcoin Mining Issues in Southeast Asia

After the crackdown in China in 2021, Southeast Asia emerged as a prominent location for Bitcoin mining. However, authorities are facing challenges related to increasing incidents of electricity theft to support these mining operations.

Recently, law enforcement in Malaysia apprehended seven individuals for allegedly mining Bitcoin using stolen electricity, as reported by Bernama.

During the raid, 52 mining rigs and several electronic devices were confiscated, with a total estimated value of around 250,000 ringgit (about $57,000).

This case is part of broader electricity theft challenges associated with Bitcoin mining throughout tropical Asia. In July, Malaysia’s deputy energy minister mentioned that illegal mining operations had stolen approximately $723 million worth of electricity from 2018 to 2023.

In a notable demonstration, Malaysian officials recently used a steamroller to destroy close to 1,000 confiscated Bitcoin mining rigs, valued at $452,000, mirroring a similar incident in 2021 that resulted in the destruction of $1.25 million worth of mining equipment.

Other Southeast Asian nations are encountering similar challenges. In Thailand, an investigation in April led to the seizure of mining equipment valued at over $5.8 million, following reports of excessive electricity usage in certain areas, according to local news.

Indonesia has also faced this issue, with law enforcement shutting down 10 mining sites accused of stealing more than $1 million in electricity in December 2023.

In Laos, the government suspended electricity supplies to crypto miners, citing insufficient energy generation and past due accounts as contributing factors.

Transformation of NFTs in China

Beiwen Digital, a state-owned entity, has announced a collaborative initiative termed the “NFT 2.0 era,” aimed at digitizing and distributing some of China’s profound cultural artifacts via non-fungible tokens (NFTs). This project was revealed on August 21, in partnership with Hong Kong-based JME Capital.

The selection includes significant cultural items such as the “Up the River During Qingming” painting, the Twelve Zodiac Heads, Mount Wutai, and the Temple of Heaven, which are slated to be released as digital collectibles in Hong Kong, recognized as a key economic hub for China.

China’s interest in blockchain technology persists, despite its strict regulatory approach to cryptocurrencies. The nation recently classified crypto transactions as mechanisms for money laundering according to directives from its Supreme Court.

Meanwhile, the global NFT marketplace is encountering challenges, with a notable decline in the prices of some high-profile NFTs. The market for popular collections such as the Bored Ape Yacht Club has seen a drop of over 91%, with CryptoPunks also witnessing a 78% decrease.

Scams Targeting South Korean Crypto Users

The Financial Supervisory Service (FSS) in South Korea has issued a warning regarding a rise in scams where fraudsters pretend to operate cryptocurrency exchanges that are about to shut down.

Victims receive messages encouraging them to withdraw funds from dormant accounts, with threats that their assets will be “burned” if not acted upon. Many of these claims are fraudulent.

Victims are directed to fake customer support chat groups where accomplices share fabricated success stories to build trust. Scammers then persuade victims to transfer money for fees or further crypto funds under false pretenses.

This trend is becoming increasingly concerning amid ongoing regulatory developments in South Korea. On August 22, financial authorities initiated inspections of cryptocurrency exchanges in accordance with new legislation that took effect on July 19, aimed at uncovering suspicious activities.

Continued Bitcoin Accumulation by Metaplanet

In its latest move, the Japanese investment firm Metaplanet has purchased 57.273 Bitcoins for approximately 500 million yen ($3.42 million), increasing its overall holdings to 360.368 Bitcoins. This follows a substantial shareholder loan announcement from another local firm, Bitcoinholic.

Although Metaplanet’s Bitcoin investments are noteworthy, they still fall short of MicroStrategy, the U.S.-based investment firm that currently holds over 226,000 Bitcoins.