Malaysia’s national utility firm Tenaga Nasional Bhd (TNB) has lost more than $1.1 billion to illegal power usage by crypto miners between 2020 and August this year, according to the energy ministry.
According to SCMP, the staggering financial damage stems from 13,827 premises caught illegally using electricity to mine cryptocurrency, primarily bitcoin, during this period.
The energy and water transformation ministry revealed these findings in a parliamentary reply dated Tuesday, noting that TNB has been working with multiple enforcement agencies to combat the theft.
While crypto mining itself is not illegal in Malaysia, tampering with electricity meters or bypassing connections violates the Electricity Supply Act.
Enforcement Crackdown Reveals Scale of Underground Mining Operations
According to the South China Morning Post, TNB has established a comprehensive database storing complete records of owners and tenants at premises suspected of electricity theft related to bitcoin mining.
This system serves as an internal reference to identify and monitor suspicious locations while providing the foundation for operational inspections.
Joint operations involving TNB, the Energy Commission, police, the Malaysian Anti-Corruption Commission, and local councils have successfully seized bitcoin mining machines at implicated premises.
The coordinated raids have shut down numerous illegal setups, safeguarding power grid stability across the nation.
Smart meters are being installed at electricity distribution substations to monitor energy usage and detect manipulation in real time.
TNB has also proposed employing artificial intelligence and predictive analytics to further enhance detection capabilities by continuously analyzing consumption patterns to spot suspicious energy usage.
Dramatic Surge in Power Theft Cases Threatens Grid Infrastructure
According to a Cryptonews report from June, power theft linked to illegal crypto mining soared 300% between 2018 and 2024, with detected cases jumping from 610 to 2,397 during this period.
The average number of crypto-related electricity thefts stood at 2,303 per year from 2020 to 2024, while TNB received approximately 1,699 crypto-related complaints between January 2020 and December 2024.
“The number of complaints reflects increasing public awareness of reporting on illicit crypto mining activities,” TNB stated.
Back in March, Bukit Aman Criminal Investigation Department Director Datuk Seri Mohd Shuhaily Mohd Zain also noted that TNB lost about 520 million Ringgit ($121 million) to electricity thefts, with most cases involving illegal crypto mining operations.
The criminal syndicates typically operate from rented shops, warehouses, or residential homes with low foot traffic, installing heavy-duty ventilation systems, air conditioners, and soundproofing materials to avoid detection.
These operations illegally bypass electricity meters by tapping directly into the main power grid, consuming massive amounts of electricity equivalent to entire residential blocks while shifting locations every few months to evade authorities.
Industry Growth Potential Undermined by Regulatory Gaps
Despite ranking among the leading countries globally by Bitcoin hash rate share, Malaysia’s competitive industrial electricity rates remain overshadowed by persistent regulatory ambiguity.
The ACCESS Blockchain Association estimates that formalizing the sector could generate 700 million Ringgit in hardware and infrastructure investments this year alone, creating up to 4,000 jobs and contributing approximately 150 million Ringgit in annual tax revenue.
Source: Access BlockchainHowever, no regulatory body currently governs the mining process itself, leaving operators facing unclear electricity tariffs, licensing requirements, and environmental compliance standards.
The Securities Commission oversees digital asset trading and custody but does not provide a specific framework for mining operations, creating major regulatory uncertainty that keeps many legal operators under the radar due to security concerns.
The ACCESS report recommends introducing dedicated mining licenses, reforming landlord liability laws, and implementing energy pricing models tied to sustainability metrics.
The organization also proposes developing Shariah-compliant mining models to leverage Malaysia’s leadership in Islamic finance, prioritizing transparent governance and renewable energy in ethical mining operations.
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