The rise of cryptocurrency mining has brought forth numerous challenges, including significant strain on energy infrastructure due to illicit activities. In Malaysia, unauthorized cryptocurrency mining operations have led to a dramatic surge in power theft, posing considerable financial and operational risks to the national grid.
Spike in Electricity Theft Cases
Malaysia’s primary energy provider, Tenaga Nasional Berhad (TNB), has reported a concerning trend: incidents of electricity theft have escalated by 300% between 2018 and 2024. The company recorded 610 cases in 2018, which ballooned to 2,397 detected instances by early 2024. TNB attributes this sharp increase predominantly to illegal cryptocurrency mining activities.
These illicit operations often involve tampering with electricity meters or creating unauthorized connections to the power grid. This allows miners to exploit subsidized electricity rates, effectively stealing power to run energy-intensive mining hardware. The financial consequences can be substantial, not only for the energy provider but also for property owners, some of whom were unaware of the illegal activity until faced with massive electricity bills, occasionally reaching up to 1.2 million Malaysian ringgits (approximately $279,265).
Countermeasures and Enforcement
To combat this growing problem, TNB is actively collaborating with law enforcement agencies, anti-corruption bodies, and local councils. This collaboration involves conducting nationwide raids on suspected illegal mining locations.
TNB highlights that these enforcement actions are crucial for maintaining the stability of the national energy supply. Key strategies being implemented include:
- Deployment of Smart Meters: These devices can detect unusual energy consumption patterns in real-time via radio signals, helping to identify potential theft quickly.
- Calls for Stricter Penalties: TNB advocates for stronger enforcement of Malaysia’s Electricity Supply Act. Current laws allow for fines up to $212,000 or imprisonment for up to 10 years for individuals caught interfering with the power grid.
TNB suggests that increased public awareness regarding illegal mining might also be contributing to the higher number of reported complaints.
Contributing Factors
Malaysia’s relatively low electricity cost is a significant factor making it an attractive location for such illicit operations. According to CEIC Data as of December 2024, the residential electricity rate was approximately $0.052 per kWh. With total power generation reaching 15,451 GWh during that period, the low cost presents a tempting opportunity for those seeking to minimize mining overheads illegally.
This issue is not unique to Malaysia. Recently, authorities in Kuwait also uncovered over 1,000 locations engaging in excessive electricity consumption, believed to be linked to unauthorized crypto mining.
Chris brings over six years of hands-on experience in cryptocurrency, bitcoin, business, and finance journalism. He’s known for clear, accurate reporting and insightful analysis that helps readers stay informed in fast-moving markets. When he’s off the clock, Chris enjoys researching emerging blockchain projects and mentoring new writers.