Crypto Miners in Malaysia Stole $1B in Power

Over the past few years, Crypto Miners in Malaysia stole $1 billion in power over five years, quietly draining the national grid while minting digital coins like Bitcoin. What sounds like a movie plot is, in reality, a massive and ongoing infrastructure problem. Malaysian authorities say that illegal cryptocurrency mining operations have siphoned off electricity on an industrial scale by bypassing meters, tampering with wiring and tapping directly into the grid. Loss estimates now exceed $1 billion in stolen electricity, depending on the period measured and the exchange rate used.

Between 2018 and 2023 alone, officials put the losses at around $720–$750 million. More recent parliamentary tallies and ministry reports now suggest the figure has crossed RM4.6–4.8 billion, or roughly $1.1 billion, as cases continued to rise through 2024 and into 2025.

In this in-depth guide, we will explore how illegal crypto mining in Malaysia grew so quickly, the tricks miners used to steal electricity, the impact on ordinary consumers and the grid, the government’s crackdown, and what this saga means for the future of Bitcoin mining in Malaysia and worldwide.

How Crypto Miners in Malaysia Stole $1 Billion in Power

Bypassing Meters and Direct Taps into the Grid

The basic model behind this scandal is deceptively simple. Cryptocurrency mining is legal in Malaysia, but stealing electricity for Bitcoin mining is not. Instead of applying for commercial tariffs and paying huge power bills, many miners allegedly chose to tap the grid illegally.

Enforcement reports describe a consistent pattern. Operators would rent homes, shops or warehouses, install rows of high-powered ASIC mining rigs, and then bypass electricity meters by illegally wiring directly into distribution lines or substations. The meter either showed drastically lower consumption or none at all, while the rigs ran 24/7.

Because electricity is one of the largest operating costs in mining, this setup transformed otherwise marginal operations into highly profitable ones. When Bitcoin prices surged, the incentive to skirt the rules became even stronger. In some cases, authorities estimated that a premise paying the equivalent of a few dollars a month in bills was actually consuming tens of thousands of dollars in stolen power.

A Five-Year Surge in Electricity Theft

While isolated incidents go back further, the problem exploded over roughly five to seven years. Malaysia’s Deputy Energy Transition and Water Transformation Minister has repeatedly highlighted the accumulation of losses from 2018 onwards, noting that power theft linked to illegal Bitcoin mining operations resulted in losses of around RM4.8 billion (~$1.08 billion) from 2018 to mid-2025.

Earlier figures showed $723 million in stolen electricity between 2018 and 2023, indicating that the trend not only persisted but likely accelerated as crypto markets heated up.

Malaysia’s national utility, Tenaga Nasional Berhad (TNB), has confirmed that between 2020 and August 2025 alone, illegal crypto miners caused about RM4.6 billion (~$1.11 billion) in electricity losses across nearly 13,827 premises. When you combine the overlapping periods and estimates, a reasonable conclusion is that crypto miners in Malaysia stole around $1 billion in power over five years, with the exact figure depending on the timeframe used.

Why Illegal Crypto Mining Became So Widespread in Malaysia

Cheap Power and a Strategic Location

Malaysia is known for relatively competitive electricity prices, a growing tech ecosystem and strong internet infrastructure. These ingredients make the country attractive for crypto mining farms, especially when compared to markets where energy is more expensive or regulations are stricter.

For criminals or opportunistic operators, the temptation is clear: cheap power becomes almost free power once you stop paying your bill. When the price of Bitcoin climbs, every kilowatt-hour of energy converts into higher potential profit, raising the payoff for electricity theft by crypto miners.

Malaysia also sits in a strategic regional position and hosts a variety of industrial and commercial zones. These areas provide cover in the form of spare warehouses, underutilized buildings and mixed-use spaces where a steady hum of machinery may not immediately raise suspicion.

Regulatory Grey Zones and Enforcement Gaps

Another factor behind the explosion of illegal mining is the regulatory ambiguity around crypto mining itself. While there are clear rules against tampering with meters or wiring, there has historically been no dedicated framework specifically tailored to regulating cryptocurrency mining in Malaysia.

This lack of a targeted mining framework created a grey zone. Exchanges and trading platforms are regulated, but miners operated in the background, sometimes registering as generic data centers or not registering at all. Without a clear licensing structure, it became harder to distinguish legitimate operators using high power loads from those disguising criminal setups.

At the same time, local enforcement capacity was stretched. Identifying power theft at scale requires sophisticated monitoring tools, inter-agency coordination and physical raids, all of which take time and money. Illegal miners exploited these gaps, constantly shifting their operations when they sensed scrutiny.

Inside Malaysia’s Underground Crypto Mining Network

Hidden in Homes, Shops and Warehouses

Reports and police raids show that illegal Bitcoin mining operations were rarely glamorous mega-facilities. Instead, they were often tucked into ordinary spaces: small shoplots, residential homes, and medium-sized warehouses.

Operators would sign leases under different names, install ventilation, lay down racks of rigs and conceal the noise where possible. From the outside, a building might look abandoned or under renovation. Inside, hundreds of machines worked nonstop, converting stolen electricity into newly minted coins.

To avoid detection, some miners installed extra fans and soundproofing, or ran their rigs at slightly lower capacity to keep heat and noise levels manageable. Others placed rigs across multiple premises instead of a single large site, spreading the risk.

Constantly Moving to Stay Ahead of Raids

As awareness of electricity theft for crypto mining grew, so did police and utility raids. In response, illegal miners adopted a “hit-and-run” model. They would operate from a location for several months, then dismantle the setup and relocate before inspections caught up.

This cat-and-mouse game made it challenging for authorities to pin down long-term operations. Even when premises were raided, some of the most sophisticated players had contingency plans, spare sites or backup hardware in different regions.

The result was a decentralized underground network of illegal miners that could adapt quickly to enforcement pressure, making the total losses much higher than what any individual case suggested.

The Hidden Cost: Impact on the Grid, Economy and Ordinary Malaysians

Strain on the National Grid and Safety Risks

Mining rigs are power-hungry. When dozens or hundreds of them are wired into a system that was never designed for that load—especially through illegal and uncertified connections—the risks multiply. Overloaded circuits can overheat, melt insulation and spark fires.

There have been multiple instances where illegal crypto mining in Malaysia was uncovered only after electrical fires or abnormal local outages. These incidents do not just burn hardware; they endanger tenants, neighbors and first responders.

On a broader level, the national grid must be sized to meet expected demand. When thousands of rigs secretly pull energy without being counted, planners lose visibility into true consumption. This can degrade power quality, increase transmission losses and complicate maintenance, all while legitimate consumers shoulder the burden.

Who Really Pays for $1 Billion in Stolen Power?

When crypto miners in Malaysia stole $1 billion in power over five years, TNB and other stakeholders did not simply absorb the loss in a vacuum. Utility companies must remain financially viable, which means revenue shortfalls have to be offset elsewhere.

In practice, the costs show up in several ways. Tariffs may rise over time for compliant households and businesses. Investments in new infrastructure or renewable projects can be delayed or reprioritized. Government resources that could have supported development are diverted into enforcement operations against illegal mining.

In short, everyday Malaysians indirectly pay for stolen power—whether through higher bills, reduced service quality or fewer public investments.

How Malaysia Is Cracking Down: Raids, Smart Meters and Data Tracking

Joint Raids and Seizure of Mining Rigs

Facing mounting losses, Malaysia has escalated its response. TNB has teamed up with the police, communications regulators, anti-corruption agencies and other authorities to track down illegal mining sites.

Raids often involve cutting off power, entering premises with warrants, and seizing hundreds of Bitcoin mining machines at once. In some high-profile cases, authorities have crushed confiscated rigs with heavy equipment as a deterrent, sending a visible signal that illegal miners would not see their hardware auctioned back into circulation.

These operations have gradually exposed the scale of the underground ecosystem, revealing how widespread electricity theft by crypto miners had become.

Smart Meters and Real-Time Monitoring

Beyond raids, Malaysia is shifting towards a more data-driven enforcement strategy. TNB has started deploying smart meters at distribution substations and rolling out advanced monitoring systems that can detect unusual patterns in consumption in real time.

Where older meters simply recorded cumulative usage, smart infrastructure can flag spikes, drops or irregularities across neighborhoods. By analyzing this data, TNB can identify hotspots where power theft for crypto mining is likely occurring and prioritize inspections accordingly.

In parallel, the utility has built a central database of owners and tenants of premises suspected of electricity theft, allowing different agencies to share information, track repeat offenders and coordinate follow-up actions.

See More: Bitcoin Mining Stock Canaan Sinks 16% What Happened

The Legal Landscape: Electricity Theft vs. Crypto Mining

Mining Is Legal, Stealing Power Is Not

A key nuance in this story is that crypto mining in Malaysia is not outright illegal. Universities and regulators have clarified that running mining equipment is permissible as long as operators comply with relevant regulations and pay for their electricity at the appropriate tariff.

The real crime lies in tampering with meters, bypassing wiring and illegally tapping the grid, acts that clearly violate the Electricity Supply Act and other criminal statutes.

This distinction matters. Authorities are not targeting crypto as a concept so much as they are targeting energy theft and infrastructure abuse. However, because most of the theft has been linked to mining, the industry naturally finds itself under heightened scrutiny.

Lack of a Dedicated Mining Framework

Despite strong enforcement against theft, there remains no fully developed licensing and regulatory framework specifically for crypto mining in Malaysia. Digital asset exchanges are licensed, but miners exist in a parallel universe where they are effectively treated like generic high-usage customers.

Industry groups and some analysts argue that this gap inadvertently pushes would-be compliant miners into the shadows, fearing that clear rules could change suddenly or that their operations could be mistaken for illegal setups.

A more transparent framework—covering zoning, energy pricing, environmental standards and reporting requirements—could help differentiate between legal Bitcoin mining farms and criminal operations, making enforcement more targeted and fair.

Can Malaysia Turn a Liability into an Opportunity?

From Power Theft Crisis to Regulated Industry

The irony is that Malaysia is well-positioned to host a healthy, regulated mining sector. It has a skilled workforce, established data centers and the potential to expand renewable generation. Properly harnessed, crypto mining could become a source of investment, job creation and grid flexibility.

Reports suggest that several medium- to large-scale miners are already operating quietly in the country, keeping a low profile due to fears of regulatory uncertainty and security risks.

If even a fraction of currently illegal miners were migrated into licensed, metered operations, the government could transform $1 billion in stolen power into a mix of tax revenue, grid revenue and investment capital. That would require clear rules, consistent enforcement and perhaps incentives for miners willing to relocate into monitored industrial zones and commit to using cleaner energy sources.

Balancing Energy Security, Climate Goals and Innovation

Any future policy must juggle three competing priorities: energy security, environmental sustainability and technological innovation.

On one side, Malaysia must protect its grid, ensure affordable power for citizens and hit climate targets. On the other, it faces pressure to attract high-tech industries, including blockchain and Web3 infrastructure, that can drive economic growth.

Well-designed rules could encourage miners to invest in renewable power, off-peak usage and demand-response programs, turning energy-intensive computing into a tool rather than a threat. Poorly designed rules—or no rules at all—will simply encourage more illegal crypto mining, more electricity theft and more drag on the system.

Global Lessons from Malaysia’s $1 Billion Power Theft

Not Just a Malaysian Problem

Malaysia is far from alone. Countries like Iran, Kazakhstan and Russia have also reported large-scale electricity theft by miners, leading to blackouts, grid instability and abrupt policy changes.

As long as proof-of-work cryptocurrencies reward whoever can deliver the most hashing power at the lowest cost, the temptation to acquire “free” power will remain. Jurisdictions with relatively low electricity prices and patchy enforcement are at particular risk.

Malaysia’s experience delivers a clear warning: if governments do not anticipate how crypto mining interacts with their energy systems, they may wake up to billions in losses before they can respond.

Why Transparency and Data Matter

One of the most important takeaways from this case is the value of data transparency and grid analytics. Without detailed visibility into where and how electricity is being used, it is almost impossible to detect sophisticated theft.

The move toward smart meters, real-time monitoring and centralised databases of suspicious premises is not just a law-enforcement upgrade; it is part of a broader modernization of the power sector.

Countries facing similar challenges can learn from Malaysia by investing in digital infrastructure, clarifying legal responsibilities and ensuring agencies share information efficiently.

Final Thoughts

The story of how crypto miners in Malaysia stole $1 billion in power over five years is about much more than rogue operators and seized rigs. It sits at the intersection of energy policy, digital innovation, financial incentives and regulatory design.

On one side, we see the dark underbelly of illegal crypto mining: overloaded circuits, hidden warehouses, fires, and billions in stolen electricity that someone else has to pay for. On the other, we see a country with the potential to host a thriving, regulated mining sector that contributes rather than undermines its economy and grid.