Bloomberg: Electricity theft exceeds one billion, Bitcoin mining rampant in Malaysia

Original Title: Bitcoin Miners Hunted After Stealing $1 Billion of Electricity From Malaysia Grid

Original Authors: Ryan Weeks, Kok Leong Chan, Netty Idayu Ismail

Original Source:

Repost: Mars Finance

In Malaysia’s hotspot regions for illegal cryptocurrency mining, the crackdown begins from the sky. Drones hover over rows of shop lots and abandoned houses, searching for abnormal heat signatures—a telltale sign of illicit mining rigs in operation. On the ground, police use handheld sensors to detect irregular electricity usage. Sometimes, the methods are more primitive: residents report strange birdsong, only for police to discover someone is intentionally playing nature sounds to mask the roar of machines behind tightly closed doors.

Together, these tools form a mobile surveillance network dedicated to rooting out illegal Bitcoin mining.

The miners being hunted are extremely cautious: they frequently move between empty shop lots and abandoned houses, install insulation to mask the heat radiation from their rigs, and equip entry points with CCTV, heavy security measures, and glass shard barriers to ward off intruders.

This is the cat-and-mouse game between Malaysian authorities and Bitcoin miners. In the past five years, Malaysia has busted around 14,000 illegal mining sites. According to the Energy Ministry, during the same period, state-owned energy company Tenaga Nasional (TNB) has suffered losses up to $1.1 billion due to electricity theft, and the situation is only worsening. In early October, as Bitcoin prices hit an all-time high, authorities had already registered around 3,000 mining-related electricity theft cases.

Now, Malaysia is ramping up enforcement efforts. On November 19, the government established a cross-department special committee, including the Ministry of Finance, Bank Negara Malaysia, and the national energy group. This task force will coordinate targeted crackdowns on illegal mining operators.

“The risks of allowing such activities now go beyond electricity theft,” said Akmal Nasrullah Mohd Nasir, Deputy Minister of the Ministry of Energy Transition and Water Transformation and chairman of the committee. “These activities could even compromise our power infrastructure and pose severe challenges to the grid system.”

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

Bitcoin mining is big business. The electricity consumption of global Bitcoin mining exceeds the total power usage of countries like South Africa or Thailand. According to a report from the Cambridge Centre for Alternative Finance, over 75% of Bitcoin mining is now concentrated in the United States. Malaysia’s share in the industry is less clear: in January 2022, its global hash rate was 2.5%, but the latest Cambridge research has yet to provide updated figures.

What’s clear is that Malaysian miners are adept at adapting all kinds of unusual sites for mining operations.

Overlooking the Strait of Malacca, the ElementX shopping mall—a massive complex that stood empty during the pandemic—continues to languish. Today, most of the mall still looks like a construction site, with exposed concrete floors and unshielded wiring. In early 2022, the mall took on a unique tenant: Bitcoin miners. The operations continued until early 2025, when a TikTok video exposing the mining activity went viral and the rigs 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, Bitcoin mining is legal as long as operators obtain electricity through lawful means and pay taxes according to regulations.

But Akmal disagrees. During the special committee’s first meeting on November 25, members debated whether to recommend a total ban on Bitcoin mining.

“Even if mining operations are compliant, the extreme volatility of the market remains a major problem,” he noted. “I don’t think any mining company can currently be considered ‘legally successful’ in the true sense.”

He further stated that the sheer number of illegal Bitcoin mining sites and the operating patterns of those behind them suggest the presence of organized crime.

“These activities are clearly controlled by criminal syndicates,” Akmal said. “Judging by their ability to rapidly move mining rigs from site to site, their methods have become highly systematic.”