Illegal Crypto Mining Causes Massive $1B Power Loss in Malaysia

Malaysia’s problem with illegal crypto mining didn’t just suddenly appear. It has been building up for years, starting with a few strange electricity-usage reports here and there. 

Over time those small warnings turned into a much bigger issue, and now the whole thing has blown up nationwide. The turning point was when Tenaga Nasional Berhad (TNB), the main electricity provider, revealed that it had lost more than $1 billion worth of electricity between 2020 and August this year because people were stealing power for mining. Even officials who were already worried about it were surprised at how huge the losses have become.

Widespread illicit use of electricity

The Energy and Water Transformation Ministry submitted a reply in parliament that made it clear things are far more serious than anyone guessed. Investigations found 13,827 different premises using electricity illegally for crypto mining. 

Mining itself isn’t banned in Malaysia, but once you start messing with the meter or bypassing it, you’re breaking the Electricity Supply Act, and that’s exactly what many operators have been doing.

Mining rigs run nonstop and pull massive amounts of power, so these operators hide what they’re doing by modifying the meters. That trick helps them use huge amounts of electricity while paying almost nothing. This has caused losses of 4.6 billion ringgit, which is around $1.11 billion. It’s not small money — it’s enough to seriously strain the grid.

How these illegal setups stay hidden

The challenge becomes harder because most illegal mining setups don’t appear suspicious at all. Many of them operate from ordinary rented houses, shoplots, or small warehouses. 

From the outside, nothing looks out of place. Inside, however, the machines run continuously, producing heat, noise, and drawing a large amount of electricity. Yet the monthly bills stay unusually low because the meters have been tampered with. Over time, these abnormal readings are what alert investigators that something is off.

Coordinated raids across the country

To deal with this mess, TNB started working with several government bodies. They’ve been doing sudden inspections and raids with the police, the communications regulator, the anti-corruption agency, and a few others. These joint operations have led to the seizure of mining machines from many different locations.

But shutting down one place doesn’t end the problem. After a raid, the miners just move somewhere else. It’s basically a constant chase, with the operators always trying to stay ahead of enforcement teams.

Building a database to track patterns

Because these illegal operations keep shifting around, TNB has started relying heavily on data. They created a database with details of owners and tenants linked to past electricity-theft cases. 

This helps them notice patterns, identify risky locations faster, and avoid wasting time on random checks. This database has become one of their most useful tools.

Real-time tech becomes the new defense

Malaysia is also stepping up its technology to detect unusual activity quicker. Smart meters are being installed at substations across the country, and these meters monitor electricity consumption in real time. 

If there’s a sudden spike or an odd pattern, the system flags it immediately, and these are exactly the kinds of signs hidden crypto miners leave behind.

Once an alert comes in, TNB usually responds fast. They try to reach the location before the miners turn everything off or disappear. These smart meters are extremely important now because illegal mining operations often grow silently before anyone notices.

Why Malaysia keeps attracting illegal miners

One big reason miners keep choosing Malaysia is the low electricity rates. It’s much cheaper compared to many other countries, so miners can run more rigs without paying as much. Since there aren’t any laws that deal directly with crypto mining, the authorities have to depend on the regular electricity rules to act against it.

Oversight instead of new regulators

Instead of introducing completely new mining laws, Malaysia has decided to strengthen the system already in place. More government agencies are working together now, inspections are being carried out more effectively, and real-time monitoring is being used in more areas.

TNB knows very well that illegal miners move around and change their methods constantly, so the company keeps adjusting how it responds. For now, the approach is simple: keep the grid under close watch, keep improving the technology, and make sure every enforcement team works together to protect the power supply from being drained any further.

Also Read: MIT Brothers on Trial for $25M Crypto Theft Case