Power Crisis: Malaysia’s $1.11B Crypto Mining Nightmare Exposed by TNB

Massive electricity theft rocks Malaysian energy sector as illegal cryptocurrency operations drain national resources.

TNB's Shocking Discovery

The national utility company uncovered sophisticated power diversion schemes fueling underground mining operations. These aren't your average basement setups—industrial-scale facilities bypassing meters and siphoning enough electricity to power entire cities.

The Billion-Dollar Drain

That $1.11 billion figure represents more than just lost revenue—it's stolen infrastructure, strained power grids, and taxpayer money vanishing into crypto wallets. While legitimate miners pay their bills, these black-market operations cut corners and costs by stealing directly from the national grid.

Regulatory Crackdown Intensifies

Authorities now face the ultimate cat-and-mouse game: tracking down hidden mining farms while legitimate crypto operations get caught in the crossfire. The irony? Traditional banks lose more to fraud in a slow quarter—but try telling that to politicians looking for headlines.

This isn't just about electricity theft—it's about proving crypto's critics wrong by rooting out the bad actors. The technology deserves better than being associated with power thieves and backroom operations.

Malaysia is dealing with one of its most expensive crypto-linked problems yet. 

The country’s national utility firm, Tenaga Nasional Bhd (TNB), confirmed it has lost US$1.11 billion in electricity to illegal crypto mining operations over the last five years – a figure large enough to be a national concern.

13,827 Premises Caught Stealing Power

The scale is staggering. According to a written reply in parliament, 13,827 premises were found illegally tapping electricity between 2020 and August this year to run Bitcoin mining machines. These setups are often hidden inside rented shops, warehouses or low-activity homes, making them hard to spot unless power usage spikes suddenly.

Crypto mining itself isn’t illegal in Malaysia. But bypassing meters or tapping directly into the grid is. The losses, amounting to RM4.6 billion, sit on TNB’s books and can eventually spill over into higher system costs and grid stress.

How These Illegal Mining Setups Operate

Authorities say these operations use direct connections to transformers or tampered meters to avoid detection. Many build out industrial cooling, ventilation, and even soundproofing so neighbors don’t notice anything unusual. Syndicates also MOVE locations every few months, making enforcement even harder.

This isn’t a new problem either. Power theft cases tied to crypto mining surged 300% between 2018 and 2024, according to earlier reports. 

TNB recorded an average of 2,303 cases every year, along with 1,699 complaints from the public during that period.

Raids, Seizures and a New Tracking Database

In response, the crackdown has grown into a multi-agency effort involving TNB, the police, the Malaysian Anti-Corruption Commission, the Energy Commission and local councils. Thousands of bitcoin mining machines have already been seized.

To tighten control, TNB has also created an internal database of landlords and tenants linked to suspected electricity theft.

As the ministry noted, “this database plays an important role as an internal reference to identify and monitor suspicious premises.”

The utility is installing smart meters at distribution substations to detect manipulation in real time and is exploring AI-based systems to read unusual consumption patterns faster.

Regulatory Gaps to Blame?

Malaysia has competitive electricity rates and a growing share of global Bitcoin hash rate. Industry groups estimate the country could attract RM400-700 million in investment, create up to 4,000 jobs, and generate RM80-150 million in annual tax revenue with proper rules in place.

But there’s still no dedicated mining licence or tariff structure. The Securities Commission only regulates trading and custody, leaving mining in a grey zone. 

That uncertainty keeps legal miners cautious and illegal miners active.

Bank Negara Malaysia is now working on tokenisation and wider digital-asset frameworks, which could be an early sign of policy movement.