Illegal Crypto Mining Causes $1.1B Power Loss in Malaysia
- Malaysia lost over $1.1 billion to electricity theft linked to illegal crypto mining.
- Authorities found 13,827 locations stealing power, most tied to large-scale mining activity.
- Joint raids and smart meter monitoring continue as officials tighten enforcement nationwide.
Malaysia has reported major financial losses linked to illegal electricity use by crypto mining operators. New government data shows that the national utility firm, Tenaga Nasional Berhad, recorded more than $1.1 billion in losses from power theft between 2020 and August 2024. Officials said the issue has persisted for years and continues to strain the country’s electrical system.
Authorities reported 13,827 premises involved in illegal electricity use during this period. Most locations hosted crypto mining machines that consumed large amounts of energy. Officials said the operations bypassed meters to avoid detection. These setups created sudden power surges that threatened grid stability in several regions.
Illegal Power Manipulation in Malaysia’s Crypto Mining Sector
Mining for crypto by itself is not illegal in Malaysia. But tampering with meters or stealing power from the grid breaches the Electricity Supply Act. Enforcement units also discovered that operators had bypassed metering systems through hidden wiring and secret switchboards. By employing these methods, machines could run without consuming credit on official leaderboards.
Tenaga Nasional Bhd (TNB) also created a database to monitor owners and tenants associated with suspected power theft. The system stores identities, property details, and previous inspection results. Officials said it helps identify recurring patterns and pinpoints high-risk sites. The database now guides planning for inspection teams across several states.
Government agencies have carried out joint operations with TNB. These efforts included the Energy Commission, police, anticorruption officials, and local councils. Teams seized large numbers of crypto mining units during coordinated raids. Many sites showed signs of prolonged and heavy energy use that had gone unreported for months.
Smart meters were installed at substations to detect unusual patterns in real time. These devices monitor voltage changes and signal possible tampering. TNB also suggested using artificial intelligence for broader analysis. Officials said AI could reveal irregular consumption trends linked to unregistered mining activity.
Rising Illegal Crypto Mining Cases Across Malaysia
Malaysia has battled illegal crypto mining since at least 2018. Cases continue to rise despite repeated enforcement actions. In August 2024, authorities destroyed more than 900 mining rigs worth almost 2 million ringgit. The equipment had been seized in earlier raids and stored as evidence.
From 2020 to 2024, officials recorded an average of 2,303 electricity theft incidents per year. TNB also received about 1,699 public complaints in the same period. Officials said the number of reports shows growing public awareness. Many complaints came from neighbors who noticed unusual noise or ventilation activity.
Police reported that TNB lost about 520 million ringgit to electricity theft earlier this year. Most losses came from illegal mining setups. Investigators found that operators often rented shops, warehouses, and quiet residential units. Many locations had strong ventilation, multiple cooling units, and soundproofing to hide machine noise.
Related: Russia Targets Illegal Crypto Mining With New Registry Plan
Operators often changed locations to avoid detection. Many relocated every few months, especially after neighbors reported unusual activity. These setups consumed electricity equal to entire blocks, creating sudden spikes that triggered inspection alerts.
Malaysia remains a significant contributor to the global Bitcoin mining power pool. On the other hand, mining takes place without any specific regulation. Electricity fees, licensing regulations, and ecological standards, which miners must abide by, are not well defined either. This has an impact on bona fide operators trying to do the right thing.
Industry groups said regulation could unlock new opportunities. An assessment estimated that clear rules could attract 700 million ringgit in hardware and infrastructure investments this year. The same study projected around 4,000 new jobs and roughly 150 million ringgit in annual tax revenue.
Industry representatives suggested that there should be particular mining licenses and more straightforward liability rules for landowners. They suggested energy pricing schemes based on sustainability criteria, too. Another proposal was for Shariah-compliant mining models to underpin Malaysia’s stance in Islamic finance. Enforcement continues, with discussions of regulatory reform ongoing.
