Illegal cryptocurrency mining in Malaysia has caused losses exceeding $1 billion over the past five years. The country's Ministry of Energy reported that from 2020 through August 2024, 13,827 cases of unauthorized electricity use for crypto mining were recorded. As a result, the national energy company Tenaga Nasional Berhad (TNB) incurred losses amounting to 4.6 billion ringgits, approximately $1.1 billion.
Extent of Losses from Illegal Mining in Malaysia
The value of stolen electricity over nearly five years surpassed $1 billion, highlighting the scale of the problem. Between 2020 and August 2024, over 13,000 cases of illegal electricity use for mining were documented. These activities led to significant financial losses for Tenaga Nasional Berhad, which estimates its damages at 4.6 billion ringgits.
Measures Against Illegal Mining in Malaysia
Malaysian authorities, in collaboration with energy providers, police, and regulators, conduct operations to identify and halt illegal cryptocurrency mining. Seizing equipment from unauthorized mining farms has become a key strategy. Although the country lacks specific laws regulating cryptocurrency mining, tampering with electricity meters and bypassing their readings are criminal offenses, enabling sanctions against offenders.
Reasons for the Rise in Illegal Mining in the Region
The increase in illegal mining in Malaysia is linked to China's 2021 ban on cryptocurrency mining. Following the ban, many miners relocated their operations to Southeast Asian countries, including Malaysia. The problem worsened in 2024 as electricity theft losses surged. For example, in summer 2021, Malaysian authorities destroyed 1,069 mining devices valued at $1.25 million as part of enforcement efforts.
Illegal Mining Situation in Russia
The issue of illegal mining is not unique to Malaysia. In Russia, draft laws are being prepared to impose liability for violations related to mining, including a separate article addressing electricity theft. In 2024, the company Rosseti recorded 130 cases of miners illegally connecting to power grids, with losses exceeding 1.3 billion rubles. The State Duma emphasizes the need for decisive measures to combat the migration of mining into the gray market.
Why This Matters
For miners in Russia and other countries operating up to 1,000 devices, understanding the scale of losses from illegal mining in Malaysia and the region helps assess the risks and consequences of such actions. Despite the lack of direct mining regulation in Malaysia, tampering with power systems is punishable by law, potentially leading to equipment seizure and criminal charges. Similar developments are underway in Russia, where legislation is tightening and energy companies are increasingly detecting violations.
What to Do?
- Monitor changes in your country's legislation to avoid violations and fines.
- Ensure legal connection of equipment to power grids and accurate accounting of electricity consumption.
- Learn from other countries' experiences in combating illegal mining to enhance the security of your operations.