Electricity theft exceeds $1 billion, Malaysian bitcoin miners face severe crackdown

In Malaysia, the crackdown on illegal bitcoin mining gangs has evolved into a "cat-and-mouse game."

By: Ryan Weeks, Kok Leong Chan, Netty Idayu Ismail, Bloomberg

Translated by: Chopper, Foresight News

In Malaysia's hotspots for illegal cryptocurrency mining, the pursuit begins from the air. Drones hover over rows of shop lots and abandoned houses, searching for abnormal heat sources—a typical thermal signature of illegal mining machines in operation. On the ground, police use handheld sensors to check for unusual electricity usage. Sometimes, the methods are even more primitive: residents call the police after hearing strange birdsong, only for officers to discover that someone is deliberately playing nature sounds to mask the roar of machines behind tightly closed doors.

Together, these tools form a mobile surveillance network, working all out to eradicate illegal bitcoin mining.

In July 2024, an official inspects mining machines after a bitcoin mining raid

The mining companies under investigation act with extreme caution: they frequently move between vacant shop lots and abandoned houses, install insulation to mask the heat radiation from operating mining machines, and equip entrances and exits with CCTV, heavy security measures, and broken glass barriers to prevent unwanted visitors.

This is the cat-and-mouse game between Malaysian authorities and bitcoin miners. Over the past five years, Malaysia has cracked down on about 14,000 illegal mining sites. According to the Ministry of Energy, during the same period, the state-owned energy company Tenaga Nasional (TNB) suffered losses of up to $1.1 billions due to electricity theft, and the situation is worsening. In early October this year, as bitcoin prices hit all-time highs, authorities had already registered about 3,000 electricity theft cases related to mining.

Bitcoin reached a record price of $126,251 in October 2025, after which cryptocurrency prices fell sharply

Now, Malaysia is ramping up its crackdown. On November 19, the government established an interdepartmental special committee, including members from the Ministry of Finance, Bank Negara Malaysia, and the national energy group. This task force will coordinate special operations targeting illegal mining operators.

"The risks of allowing such behavior go beyond electricity theft," said Akmal Nasrullah Mohd Nasir, Deputy Minister of the Ministry of Energy Transition and Water and chairman of the committee. "These activities could even damage our power facilities and pose a serious challenge to the grid system."

Bitcoin mining is essentially a computing power race: rows of specialized equipment perform trillions of calculations per second in hopes of successfully verifying transactions and earning bitcoin rewards.

Bitcoin mining is big business. The global electricity consumption of bitcoin mining has already surpassed the total electricity usage of South Africa or Thailand. According to a report by the Cambridge Centre for Alternative Finance, over 75% of bitcoin mining activities are currently concentrated in the United States. Malaysia's share in the industry is relatively unclear: in January 2022, its global computing power share was 2.5%, but Cambridge's latest research has not released updated data.

What is clear is that Malaysian miners are adept at transforming all kinds of special venues for mining.

The ElementX shopping mall overlooking the Strait of Malacca—a massive complex that was deserted during the COVID-19 pandemic and has struggled ever since. Today, most of the mall still looks like a construction site, with exposed concrete floors and uncovered wiring. In early 2022, the mall welcomed a special tenant: bitcoin miners. It wasn't until early 2025, when a TikTok video exposing the mining operation went viral, that the mining machines were cleared out.

Similar covert mining sites exist hundreds of miles away in Sarawak, East Malaysia. Bloomberg previously reported that a company called Bityou set up a mining farm at an old logging site. The company did not respond to requests for comment regarding this article.

In Malaysia, as long as operators legally obtain electricity and pay taxes according to the law, bitcoin mining is considered legal.

But Akmal disagrees. At the first meeting of the special committee on November 25, members discussed "whether to recommend a complete ban on bitcoin mining."

"Even if mining operations are compliant, the extreme volatility of the market they operate in remains a major problem," he pointed out. "I don't think there is any mining company that can be considered a 'legally successful operation' at present."

He further stated that the sheer number of illegal bitcoin mining sites and the activity patterns of those behind them indicate the presence of organized crime.

"These activities are clearly controlled by criminal groups," Akmal said. "Judging from the mobility of moving mining machines between different locations, their modus operandi has become a fixed pattern."