Malaysian Bitcoin miners steal over $1 billion in electricity: a “cat-and-mouse game” to crack down on illegal mining

Written by: Ryan Weeks, Kok Leong Chan, Netty Idayu Ismail, Bloomberg

Translated by: White55, Mars Finance

In Malaysia’s hotspots for illegal cryptocurrency mining, crackdowns begin from the air. Drones hover above rows of shoplots and abandoned houses, searching for abnormal heat sources—a typical signature of illegal mining machines in operation. On the ground, police use handheld sensors to detect abnormal electricity usage. Sometimes, the methods are even more primitive: residents report strange birdsong, which, upon police investigation, turns out to be someone purposely playing nature sounds to mask the roar of mining equipment behind tightly shut doors.

These tools together form a mobile surveillance network, working to eradicate illegal Bitcoin mining.

In July 2024, an official inspects mining rigs after a Bitcoin mining raid.

The targeted mining operations are extremely cautious: they frequently relocate between vacant shoplots and abandoned houses, install insulation to hide the heat radiation from running machines, and equip entrances with CCTV, heavy security, and broken glass barriers to guard against intruders.

This is the cat-and-mouse game between Malaysian authorities and Bitcoin miners. Over the past five years, Malaysia has uncovered around 14,000 illegal mining sites. According to the Ministry of Energy, during the same period, state-owned energy company Tenaga Nasional (TNB) suffered losses as high as $1.1 billion due to electricity theft, and the situation is only 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 hit a record price of $126,251 in October 2025, after which cryptocurrency prices fell sharply.

Now, Malaysia is stepping up its crackdown. On November 19, the government established a cross-departmental 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 risk of allowing such activities goes beyond electricity theft,” said Akmal Nasrullah Mohd Nasir, Deputy Minister of Energy Transition and Water Transformation, who also chairs the committee. “These activities can even damage our power infrastructure and pose serious challenges to the grid system.”

Bitcoin mining is essentially a race of computing power: rows of specialized devices perform trillions of calculations per second, aiming to validate transactions and earn Bitcoin rewards.

Bitcoin mining is big business. The electricity consumption of global Bitcoin mining already exceeds that of the entire country of South Africa or Thailand. According to a report by the Cambridge Centre for Alternative Finance, over 75% of global Bitcoin mining now takes place in the United States. Malaysia’s share in the industry is relatively unclear: as of January 2022, its global hash rate share was 2.5%, but the latest Cambridge research has not released updated data.

What’s clear is that Malaysian miners excel at repurposing all kinds of unusual venues for mining.

Overlooking the Strait of Malacca, the ElementX Mall is a sprawling complex that was deserted during the pandemic and has struggled ever since. Today, most of the mall still resembles a construction site, with exposed concrete floors and unshielded electrical wiring. In early 2022, a special tenant arrived: Bitcoin miners. The machines remained there until early 2025, when a viral TikTok video exposed the mining operations and the rigs were finally removed.

Hundreds of miles away in the East Malaysian state of Sarawak, similar covert mining sites exist. Bloomberg previously reported that a company named Bityou built a mining operation at an old logging site. The company did not respond to requests for comment on this article.

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

But Akmal disagrees. At the special committee’s first meeting on November 25, members discussed “whether to recommend a complete ban on Bitcoin mining.”

“Even if mining operations are compliant, the extreme volatility in the market is a major challenge,” he said. “I don’t think there’s a single mining company that can truly claim to be ‘legally and successfully operating.’”

He further stated that the huge number of illegal Bitcoin mining sites and the operational patterns of those behind them indicate the presence of organized crime.

“These activities are clearly controlled by criminal syndicates,” Akmal said. “From the mobility of mining rigs moving frequently between locations, it’s clear their methods have become standardized.”