Affordable Electricity and Regulatory Gaps Drive Malaysia’s Rise in Unlawful Crypto Mining

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Affordable Electricity and Regulatory Gaps Drive Malaysia’s Rise in Unlawful Crypto Mining

Bitget-RWA2025/11/19 10:02

By:Bitget-RWA

- Malaysia's TNB reported $1.11B electricity losses from 2020-2025 due to illegal crypto mining, with 13,827 premises bypassing meters to mine Bitcoin . - Miners exploited low-traffic warehouses and homes to evade detection, consuming energy equivalent to entire residential blocks. - TNB deployed smart meters, AI analytics, and joint enforcement operations to combat theft, but cases surged 300% since 2018. - Legal gray areas persist as crypto mining remains unregulated, prompting calls for Shariah-complian

Malaysia’s main electricity provider, Tenaga Nasional Bhd (TNB), has disclosed that unauthorized cryptocurrency mining activities

resulted in electricity losses exceeding $1.11 billion

from 2020 through August 2025, as reported by the Ministry of Energy and Water Transformation. In a statement to parliament, the ministry noted that 13,827 locations were found to be illegally using electricity for crypto mining—mainly

bitcoin

—by either bypassing meters or tampering with electrical connections. The financial damage,

totaling 4.6 billion ringgit

, has put significant pressure on TNB’s resources and sparked concerns about the risks posed to the national power grid.

These illegal mining operations, which are often set up in low-profile areas like warehouses and homes,

enabled operators to avoid being discovered

while drawing power amounts similar to those used by entire residential complexes. TNB has partnered with law enforcement, anti-corruption officials, and other agencies to confiscate mining hardware and dismantle these setups. Nevertheless,

incidents of electricity theft tied to crypto mining jumped 300%

between 2018 and 2024, with an average of 2,303 cases reported each year during the pandemic up to 2024.

Affordable Electricity and Regulatory Gaps Drive Malaysia’s Rise in Unlawful Crypto Mining image 0

In response, TNB has

installed smart meters at substations

to track energy consumption in real time and spot any tampering. The utility has also

created a database to monitor suspicious sites

with details on property owners and tenants to support inspection efforts. TNB is also exploring advanced technologies such as predictive analytics and artificial intelligence to detect unusual usage patterns that may signal mining activity.

However, regulatory hurdles remain. Although mining cryptocurrencies is not explicitly illegal in Malaysia, enforcement depends on the Electricity Supply Act, which forbids tampering with meters and unauthorized grid access. The lack of a dedicated licensing system for mining has created legal ambiguities, making it harder to regulate the sector. Advocacy organizations, including the ACCESS Blockchain Association, have urged the government to introduce clear regulations, such as Shariah-compliant frameworks and energy pricing linked to sustainability, to leverage Malaysia’s low electricity costs and attract legitimate investors.

Public education initiatives have also expanded, with TNB receiving 1,699 reports of illegal mining between 2020 and 2024. Major enforcement actions, like a police raid in March 2025 that confiscated $1.25 million in mining equipment, highlight the authorities’ determination to address the issue. Still, as miners frequently move to new locations to escape detection, officials continue to face challenges in protecting the power grid and recouping losses.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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