Malaysia Faces Huge Power Theft Crisis With $1.1 Billion Lost to Illegal Bitcoin Mining Operations

Malaysia Loses Over RM4.57 Billion (US$1.1 Billion) To Illegal Crypto Mining Operations

Malaysia’s national utility Tenaga Nasional Bhd (TNB) has revealed losses exceeding RM4.57 billion (US$1.1 billion) between 2020 and August 2025 due to illegal electricity consumption linked to cryptocurrency mining, primarily bitcoin.

Deputy Prime Minister Datuk Seri Fadillah Yusof, who also serves as Energy Transition and Water Transformation Minister, disclosed that TNB identified 13,827 premises engaged in electricity theft during this period.

How Are Criminal Syndicates Exploiting The Power Grid

The illicit operations typically take place in rented shops, warehouses, or low-traffic residential properties.

Operators install heavy-duty ventilation systems, air conditioners, and soundproofing materials to avoid detection, while illegally bypassing electricity meters and tapping directly into the main grid.

These setups often consume power equivalent to entire residential blocks, and operators frequently shift locations to evade enforcement.

TNB’s Database And Enforcement Efforts Track Illegal Miners

To counter the surge in theft, TNB has developed a comprehensive database containing detailed records of owners and tenants of premises suspected of electricity theft.

Fadillah said,

“This database plays a crucial role in identifying and monitoring suspicious premises and forms the basis for enforcement inspections.”

Coordinated operations involving TNB, the Energy Commission (ST), police, the National Anti-Financial Crime Centre, Malaysian Communications and Multimedia Commission (MCMC), CyberSecurity Malaysia, Inland Revenue Board (LHDN), local authorities, and the Malaysian Anti-Corruption Commission (MACC) have led to the seizure of bitcoin mining machines at implicated premises, effectively crippling illegal operations.

Smart Meters And Predictive Analytics Offer New Detection Methods

Technical measures have also been stepped up.

TNB is installing smart meters at distribution substations to enable real-time monitoring and rapid detection of meter tampering.

Under the Distribution Transformer Meter (DTM) Pilot Project, abnormal energy consumption patterns are tracked to identify potential theft.

Fadillah highlighted that TNB is exploring artificial intelligence and predictive analytics to continuously analyse consumption patterns and flag suspicious usage.

Why The Problem Has Escalated Despite Legal Mining

While crypto mining itself is legal in Malaysia, tampering with electricity meters or bypassing connections violates the Electricity Supply Act.

Power theft linked to illegal mining has surged dramatically, with detected cases rising from 610 in 2018 to 2,397 in 2024, marking a 300% increase.

Between 2020 and 2024, TNB received an average of 2,303 complaints annually regarding crypto-related electricity theft, reflecting growing public awareness of illicit mining activities.

Regulatory Gaps Hinder Legal Mining Industry Growth

Malaysia ranks among the top countries globally by Bitcoin hash rate share, yet unclear regulations continue to hinder the sector’s legitimate growth.

The ACCESS Blockchain Association projects that formalizing the mining industry could draw RM700 million (US$170 million) in hardware and infrastructure investments in 2025.

This can create approximately 4,000 jobs, and generate RM150 million (US$36 million) in annual tax revenue.

Source: Access Blockchain

Currently, no specific regulatory body governs the mining process.

Operators face uncertainty regarding electricity tariffs, licensing, and environmental compliance.

ACCESS recommends introducing dedicated mining licences, reforming landlord liability laws, and linking energy pricing to sustainability metrics.

The organisation also proposes Shariah-compliant mining models to encourage transparent governance and renewable energy adoption.

Public Awareness Campaigns Aim To Curb Theft

Beyond enforcement, TNB has rolled out public awareness campaigns through press releases, television segments, and various communication platforms to educate the public about electricity theft risks.

Stakeholder engagement sessions with MPs, ministries, the Energy Commission, and judicial officers aim to strengthen collaboration in combating illicit activities.

Fadillah emphasised the wider implications, stating,

“These activities not only endanger users' safety but also jeopardise the country's economic stability, increase public safety risks, damage property and pose a serious threat to the national power supply system.”

Illegal Mining Threatens Grid Stability And Economic Security

The scale of power theft highlights the tension between Malaysia’s emerging crypto mining industry and the national electricity grid.

While the sector offers economic potential, unregulated operations continue to strain infrastructure and prompt losses measured in billions of Ringgit (US$1.1 billion).

TNB’s combined approach of enforcement, technological monitoring, and public engagement represents the country’s most coordinated effort yet to safeguard the energy system from the shadow of underground mining networks.