OVER the last few months, if not years, there have been many reports of police raiding cryptocurrency, such as Bitcoin mining operations and seizing thousands of ringgit in equipment. Is such mining illegal in Malaysia?
Verdict:
NOT ILLEGAL
Firstly, the cryptocurrency operations are being raided not because they are mining crypto, but rather because they are stealing electricity from Tenaga Nasional.
It is perfectly legal in Malaysia to mine, buy and sell cryptocurrency.
Cryptocurrency, however, is not recognised as legal tender in the country so cannot be used to pay for goods and services.
While not recognised as legal tender, it is recognised as an intangible commodity and profits made from trading it can be taxed.
This brings it under the purview of the Malaysian Securities Commission, which has recognised several crypto exchanges for Malaysians to trade in.
While mining crypto may be legal (so long as you are paying your electricity bills), other laws and by-laws might prohibit where it can be done.
Crypto mining is a noisy affair, with a single mining rig capable of producing up to 90 decibels of sound, which is louder than a washing machine or leaf blower.
Most miners need a roomful of these devices to be profitable so you can imagine how much noise it would produce and why it would not be allowed in residential areas.
A typical Bitcoin mining farm. - photo courtesy of Bloomberg
Secondly, most if not all reports claiming that a Bitcoin operation has been raided in Malaysia is actually in error.
The vast majority of these operations do not mine Bitcoin, but rather another alt coin (alternative coin) such as Ethereum.
Simply put, Bitcoin mining is an expensive exercise where one operation requires almost innumerable stacks of machines stored in a warehouse with electricity consumption touching terawatts per hour.
Some operations overseas have refurbished abandoned coal power stations to power their operations.
These are industrial level affairs so it's reasonable to say that they cannot be hidden in a condominium or house.
There are over 18,000 cryptocurrencies in existence, but only 728 are technically mineable.
Of this, most small-time miners would be concentrating on a handful of 'coins' that their machines are capable of handling with Bitcoin being completely out of scope for them.
References:
1. https://www.sc.com.my/api/documentms/download.ashx?id=aeb10f62-944b-4d83-8aa0-4ed492dc1109
2. https://news.bitcoin.com/mineable-cryptocurrencies-are-far-more-valuable-than-non-mineable-coins/#:~:text=Moreover%2C%20there%20are%20only%20eight,XMR%2C%20DASH%2C%20and%20ETC.
3. https://www.coinlore.com/mineable-coins/all
4. https://www.investopedia.com/tech/most-important-cryptocurrencies-other-than-bitcoin/#:~:text=Click%20Play%20to%20Learn%20All%20About%20Altcoins&text=One%20reason%20for%20this%20is,communities%20of%20backers%20and%20investors.
5. https://www.nasdaq.com/articles/we-hear-you%3A-bitcoin-mining-noise-pollution-is-a-solved-problem
6. https://www.cdc.gov/nceh/hearing_loss/what_noises_cause_hearing_loss.html
FAQs
Mining cryptocurrency is not illegal but the act of stealing the electricity to mine the cryptocurrency is the one that is illegal.
Is mining for cryptocurrency illegal? ›
Currently, Bitcoin mining is legal in the United States and the majority of other countries. However, you may want to research local laws where you live.
Does Malaysia allow Bitcoin? ›
As of September 2023, our comprehensive guide to buying Bitcoin in Malaysia outlines a variety of cryptocurrency exchanges available for users to trade Bitcoin.
What countries is crypto mining illegal? ›
Where Is Crypto Illegal? A Full List of Countries
- China. China is the biggest country to ban all crypto on its shores. ...
- Nepal. Nepal also banned crypto in September 2021. ...
- Afghanistan. Afghanistan also banned crypto in September 2021. ...
- Bangladesh. ...
- Morocco. ...
- Algeria. ...
- Egypt. ...
- Bolivia.
In Malaysia, crypto mining itself isn't illegal. But some miners steal electricity, for instance by tampering with meter installation or bypassing the meter and gaining an illegal connection.
Is Malaysia saying no to cryptocurrency as legal tender? ›
This is in response to a proposal put forth in the Malaysian parliament last week to make Bitcoin legal tender. Malaysian Deputy Finance Minister clarified on Thursday in the parliament that Malaysia has no plans of accepting Bitcoin as a legal tender in the country.
Is crypto mining real or fake? ›
Cloud mining is regarded as a scam for a variety of reasons, including unrealistic returns, a lack of transparency, fraudulent or unethical practices, high costs, and profitability challenges.
How harmful is crypto mining? ›
Cryptocurrency mining is an extremely energy-intensive process that threatens the ability of governments across the globe to reduce our dependence on climate-warming fossil fuels.
Do you need a permit to mine Cryptocurrency? ›
Obtaining Necessary Permits and Licenses: Depending on where you live, you may need a money transmitter license or a virtual currency exchange license to legally mine cryptocurrencies. It's important to understand which licenses you need and how to obtain them.
Which crypto platform is legal in Malaysia? ›
Luno Wallet — Reputable and fully licensed crypto wallet and exchange in Malaysia. Regulated by the Securities Commission Malaysia and ideal for people new to cryptocurrencies. ZenGo — Highly secure non-custodial crypto wallet app coming with no keys or seed phrases.
Malaysia can be considered a crypto-friendly jurisdiction as crypto transactions are currently tax-free. Cryptocurrencies do not qualify for capital gains tax since the authorities do not consider digital currencies to be assets or legal money.
What crypto platform to use in Malaysia? ›
BEST CRYPTO EXCHANGES MALAYSIA FOR 2023
| TOP CRYPTO EXCHANGES IN MALAYSIA | BEST FOR |
|---|
| Luno | Top Digital Asset Exchange |
| Tokenize | Top Digital Currency Exchange |
| Sinegy | Best Crypto Exchange in Malaysia |
| Kucoin | 24*7 Customer Support |
2 more rowsJun 26, 2023
If Congress were to pass legislation banning them from listing cryptocurrency assets, the cryptocurrency market would quickly fade. Alternative decentralized exchanges do exist, but a ban could be enforced against them, too, because control of those exchanges tends to be concentrated in the hands of a few people.
Is crypto illegal in usa? ›
As of now, NO. You cannot purchase or exchange any cryptocurrency due to the lack of a regulatory framework on cryptocurrencies in the US. However, the situation might change soon if cryptocurrency regulation in the US is introduced to start crypto financial services.
Which country is number 1 in crypto mining? ›
The US is the largest Bitcoin mining industry globally, representing over 38% of the global Bitcoin network's hash rate. From January 2020 to January 2022, the US witnessed a significant increase in its global share of Bitcoin mining, climbing from 4.5% to 37.8%.
Is crypto mining taxable in Malaysia? ›
Is Malaysia a crypto-friendly jurisdiction? Malaysia can be considered a crypto-friendly jurisdiction as crypto transactions are currently tax-free. Cryptocurrencies do not qualify for capital gains tax since the authorities do not consider digital currencies to be assets or legal money.
Is crypto platform legal in Malaysia? ›
Yes, buying and trading cryptocurrencies is legal in Malaysia. The Malaysian government, specifically the Securities Commission Malaysia, views cryptocurrencies as securities and they are subject to regulation under the Capital Markets and Services Act 2007.
Can you mine gold in Malaysia? ›
Mining is one of the main industries in Malaysia. Malaysia produces aggregate, bauxite, clay, coal, copper, feldspar, gold, gravel, ilmenite, iron ore, kaolin, limestone, mica, monazite, sand, silica sand, struverite and tin.
Is Bitcoin mining profitable in Malaysia? ›
If you calculate the ROI of mining Bitcoin in Malaysia, chances are it will not be very profitable. This is because of 2 major reasons: You will lose out to the larger communities like China. The equipment needed for mining is very expensive, often going into thousands of ringgit.
A typical Bitcoin mining farm. - photo courtesy of Bloomberg