Illegal crypto mining costs Malaysia over 100 million ringgit yearly

Illegal cryptocurrency mining in Malaysia has surged amid unclear policies and regulatory gaps, resulting in significant losses for the country’s electricity provider.

Tenaga Nasional Berhad (TNB), Malaysia’s multinational electricity company, reported losses of 441.6 million ringgit ($104.2 million) due to electricity theft linked primarily to illegal Bitcoin (CRYPTO:BTC) mining between 2020 and September 2024.

From 2018 to 2021, losses amounted to 2.3 billion ringgit, highlighting the scale of the issue.

A report from the Access Blockchain Association of Malaysia emphasised that formalising illegal mining activities could convert stolen electricity into legitimate revenue for TNB and taxable income for the government.

“Formalising this activity would transform stolen energy into legitimate revenue for TNB and generate taxable income for the government,” the report stated.

Malaysia’s strategic location, growing tech ecosystem, and expertise in Shariah-compliant finance position it well to benefit from crypto mining.

However, inconsistent policies and a lack of clear regulatory frameworks hinder the country’s ability to capitalise on this potential revenue stream.

The report noted that Malaysia currently ranks seventh to eighth globally in Bitcoin (CRYPTO:BTC) mining hashrate, contributing about 2.5% to 3% of global mining activity.

Several medium- and large-scale legal miners operate in Malaysia but often avoid publicity due to concerns over cyberattacks, theft, and regulatory uncertainty.

Companies such as Hatten Land have begun exploring above-ground mining infrastructure and partnerships with firms like Hydra X and Frontier Digital Asset Management.

The report recommends policy measures including the creation of mining-specific licenses, green tariff initiatives, closing legal loopholes related to electricity theft, and developing Shariah-compliant mining models.

Malaysia’s abundant hydropower resources and strong internet connectivity further support its potential in the nearly $3 billion global crypto mining market.