Malaysia’s national utility, Tenaga Nasional Bhd (TNB), has reported losses exceeding $1.1 billion between 2020 and August 2024 due to unauthorized electricity usage by cryptocurrency miners.
Enforcement agencies discovered 13,827 premises diverting power illegally, primarily for Bitcoin mining, according to the Ministry of Energy and Water Transformation.
Although cryptocurrency mining is legal in Malaysia, tampering with electricity meters or bypassing connections violates the Electricity Supply Act. TNB has coordinated with the Energy Commission, police, the Malaysian Anti-Corruption Commission, and local authorities to seize mining equipment, shut down illegal operations, and protect grid stability.
Advanced monitoring and enforcement measures
TNB has developed a detailed database of suspected premises to guide inspections and operational monitoring. The utility is installing smart meters at distribution substations to track energy consumption in real time, while exploring artificial intelligence and predictive analytics to detect anomalies and prevent future theft. Between 2020 and 2024, TNB recorded an average of 2,303 crypto-related electricity theft cases annually, reflecting growing public reporting of illicit operations.
Criminal groups typically operate from rented warehouses, shops, or residential properties, using heavy-duty ventilation, air conditioning, and soundproofing to avoid detection. They tap directly into the main power grid, consuming electricity comparable to entire residential blocks, and relocate frequently to evade authorities.
Economic and regulatory implications
Malaysia remains a significant contributor to global Bitcoin hash rates, yet the sector faces regulatory uncertainty. Mining operations lack clear licensing, energy tariffs, and environmental compliance standards, leaving legal operators cautious.
Formalizing the industry could generate approximately 700 million Ringgit in hardware and infrastructure investment this year, create up to 4,000 jobs, and contribute around 150 million Ringgit in annual tax revenue. The ACCESS Blockchain Association recommends introducing dedicated mining licenses, reforming landlord liability laws, and tying energy pricing to sustainability metrics. Proposals also include Shariah-compliant mining models to integrate ethical governance, renewable energy, and transparency into the sector.
As Malaysia confronts the challenges of underground mining, coordinated enforcement and regulatory clarity will be essential to secure the power grid while unlocking the economic potential of legal cryptocurrency operations.
Industrial mining shifts under regulatory and energy pressures
Energy-intensive cryptocurrency mining is prompting operational shifts worldwide, with even established firms reconsidering their strategies in response to regulation, costs, and sustainability concerns.
Canadian miner Bitfarms, for example, recently announced plans to phase out its Bitcoin mining operations and transition toward artificial intelligence infrastructure by 2027. The move reflects mounting regulatory scrutiny and rising electricity costs, as jurisdictions like British Columbia permanently ban new crypto mining connections to preserve grid stability for resource-based and manufacturing projects. Iran has become a major cryptocurrency mining hub, fueled by extremely cheap electricity and efforts to bypass international sanctions. The country now accounts for roughly 4.2% of global Bitcoin mining, with around 10 million users nationwide.
Most operations are unlicensed, officials estimate 95% of the 427,000 active mining devices operate without authorization, tapping subsidized electricity or disguising themselves as industrial facilities. This illegal activity consumes over 1,400 megawatts daily, contributing to 15%–20% of nationwide power shortages and frequent blackouts.
In response, miners and industrial players are exploring alternative models, whether relocating to regions with surplus renewable energy, adopting more efficient hardware, or pivoting to less energy-intensive digital services. As energy and regulatory landscapes evolve, these adjustments signal a turning point in how the crypto industry interacts with national infrastructure and policy frameworks.
Anastasiia G
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