Illegal crypto mining in Malaysia has surged significantly amid unclear regulatory policies, causing major electricity theft and financial losses. Malaysia's crypto mining market is projected to grow by 110.2% in 2025, reaching $5.13 billion, driven by its strategic location and tech ecosystem. However, illegal mining and lack of regulation threaten to limit this potential.
The national electricity provider, Tenaga Nasional Berhad (TNB), reported a nearly 300% increase in electricity theft linked to crypto mining from 2018 to 2024. The number of detected theft cases rose from 610 in 2018 to 2,397 in 2024, with an annual average of 2,303 cases between 2020 and 2024. TNB attributes losses of over 441.6 million ringgit ($104.2 million) from 2020 to 2024 mainly to illegal Bitcoin mining, with total losses from 2018 to 2021 reaching 2.3 billion ringgit.
Illegal miners tamper with electricity meters to access cheap power, often setting up secret operations even in residential areas, causing huge electricity bills for unsuspecting property owners. The high power consumption of mining rigs (1,000 to 8,000 watts each) exploits Malaysia's relatively low electricity cost of about $0.052 per kWh.
While crypto mining itself is not banned, tampering with electrical installations is a serious offense punishable by fines up to 1 million ringgit ($232,720) and imprisonment up to 10 years. Authorities have conducted nationwide raids shutting down thousands of illegal mining operations to protect the power grid.
Legal crypto mining operators do exist in Malaysia but often operate discreetly due to concerns over cyberattacks, theft, and regulatory uncertainty. The government currently lacks a specific regulatory framework for crypto mining, with the Securities Commission overseeing crypto exchanges but not mining.
Experts recommend establishing mining-specific licenses, green energy tariffs, and closing legal loopholes to curb illegal mining and harness the sector's full potential.
Malaysia faces a growing challenge of illegal crypto mining driven by unclear policies and enforcement gaps, resulting in significant electricity theft and financial losses. Stronger regulation, enforcement, and formalization of mining activities are needed to stabilize the power grid and unlock the economic benefits of crypto mining.
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