Illegal cryptocurrency mining in Malaysia is spiraling out of control, costing the country over $100 million in electricity theft alone since 2020. According to a new report by the Access Blockchain Association of Malaysia, these illegal operations are thriving amid regulatory ambiguity, weak enforcement, and an outdated policy framework.

Tenaga Nasional Berhad (TNB), Malaysia’s largest energy provider, reported losing 441.6 million ringgit ($104.2 million) from electricity theft between 2020 and September 2024, with most of the loss linked to unauthorized Bitcoin mining. Between 2018 and 2021, theft-related losses reached a staggering 2.3 billion ringgit.

Despite being home to high-speed internet, low-cost hydropower, and advanced financial expertise, Malaysia lacks a clear legal framework for crypto mining. While the Securities Commission regulates crypto exchanges, there are no specific laws addressing mining operations. The report estimates Malaysia contributes 2.5% to 3% of global Bitcoin mining, ranking it among the top ten countries by hashrate.

The report urges the government to formalize illegal miners through metered connections, enabling revenue generation for TNB and tax income for the state. It also recommends introducing a dedicated mining license, promoting green tariffs, and supporting Shariah-compliant models to attract more legitimate operators.

Even legal mining firms remain in the shadows, fearing cyberattacks and unpredictable regulations. However, companies like Hatten Land are beginning to invest in regulated infrastructure, forging partnerships in Melaka with Hydra X and Frontier Digital Asset Management.

With crypto mining poised to become a multibillion-dollar global industry, Malaysia faces a choice: reform policies to harness its potential or continue losing millions to the underground market.