$1.1 Billion in Electricity Theft! The "Cat-and-Mouse Game" Between Malaysian Bitcoin Miners and the Government Escalates

Malaysia is launching a comprehensive crackdown on illegal Bitcoin miners. Over the past five years, these miners have stolen electricity from the national grid to mine, causing state-owned energy company Tenaga Nasional losses of up to $1.1 billion, with over 14,000 illegal mining sites uncovered. To tackle this challenge, the Malaysian government has set up an interdepartmental special committee, deploying high-tech tools such as drones and thermal imaging devices for tracking. This contest is not only about electricity theft, but also exposes the complex ecosystem of the global cryptocurrency mining industry straddling regulation and gray areas amid wild Bitcoin price swings.

$1.1 Billion in Power Bills Evaporate: A High-Tech “Cat and Mouse Game”

In some parts of Malaysia, a silent, high-tech hunt is underway. Drones hover over shops and abandoned houses, scanning for unusual heat sources; police armed with sensors patrol the streets for irregular power usage signals; sometimes, clues even come from residents reporting “strange bird calls”—often the miners’ attempt to mask the hum of mining machines. All of this is aimed at tracking down elusive illegal Bitcoin miners.

These miners are equally adept at counter-surveillance. Like nomads, they constantly move between vacant shops and abandoned residences. To conceal the massive heat and noise generated by hundreds of mining rigs, they install insulation shields, set up CCTV, heavy-duty locks, and even broken glass warning devices at entrances. This game of “the higher the wall, the higher the ladder” has made crackdowns exceptionally difficult. Statistics show that over the past five years, Malaysian authorities have recorded about 14,000 illegal mining sites, and as Bitcoin reached new highs before October 2025, electricity theft cases surged, with around 3,000 cases recorded from the start of the year to October alone.

Huge economic incentives drive this cat-and-mouse game. Bitcoin mining is a “brute force competition” of computing power, requiring massive electricity to run specialized mining rigs (mining machines). When Bitcoin prices are high, mining remains profitable even with regular electricity bills; stealing electricity, however, means almost zero-cost windfall profits. This temptation pushes many to take risks, even forming highly organized operational models.

Key Data on Illegal Bitcoin Mining in Malaysia

Economic Losses: Over the past five years, electricity theft has caused state-owned energy company Tenaga Nasional losses of about $1.1 billion.

Case Scale: About 14,000 illegal mining sites discovered; from early 2025 to October, around 3,000 new electricity theft mining cases found.

Global Hashrate Share: According to the Cambridge Centre for Alternative Finance (January 2022), Malaysia once accounted for 2.5% of global Bitcoin hashrate.

Government Response: Establishment of an interdepartmental special committee with members from the Ministry of Energy, Ministry of Finance, central bank, and national energy company.

Official Allegations: The Deputy Minister for Energy Transition hinted that organized crime groups may be operating behind these illegal mining farms.

From Shopping Malls to Logging Yards: Miners’ “Spatial Magic”

The “creativity” of Malaysia’s illegal miners is not only reflected in their evasion tactics but also in their ingenious use of unconventional spaces. The ElementX shopping mall, left largely vacant after the COVID-19 pandemic, once became a hiding place for Bitcoin mining farms. In this vast, construction-like building, mining rigs ran around the clock until a TikTok video documenting the operation went viral, forcing the miners to flee.

Hundreds of kilometers away in Sarawak, the scene is equally surprising. Reportedly, a company named Bityou once converted a former logging camp into a mining farm. These cases reveal a trend: illegal miners are actively seeking industrial or commercial ruins far from residential areas, with ample space and low visibility as their bases. These locations often have the potential for high-power grid access, come with low or no rent, and are usually unmanaged—making them ideal for illegal operations.

Behind this “spatial magic” is a microcosm of the global migration of the Bitcoin mining industry. Faced with regulatory differences, energy costs, and geographic environments, miners are always searching for cost “lowlands.” Malaysia’s relatively low electricity costs (especially zero cost when stealing electricity), warm climate (which aids natural cooling but increases the risk of heat detection), and laxer regulations in some areas once made it a “hot spot” for miners.

Government Strikes Hard: From Special Crackdowns to Considering Total Bans

Faced with rampant electricity theft mining and massive economic losses, the Malaysian government is escalating its response. On November 19, 2025, the government announced the formation of a high-level interagency special committee, with members from the Ministry of Finance, Bank Negara Malaysia (central bank), and national energy company TNB. The establishment of this committee marks the shift from local police raids to systemic, coordinated national-level action.

Deputy Minister for Energy Transition and Water Resources Akmal Nasrullah personally leads the committee and has participated in several raids. He pointed out that the seriousness of the problem goes far beyond simple theft: “The risks of allowing such activities are no longer just theft. They can actually damage our power infrastructure. This poses a challenge to our system.” To connect to high-voltage grids, illegal miners often crudely tamper with power lines, causing not only energy losses but also serious threats to grid safety, potentially triggering fires or large-scale blackouts.

Even harsher measures may be in the works. At the committee’s first meeting, members debated whether to recommend a complete ban on Bitcoin mining. Deputy Minister Akmal is outspoken on the matter, arguing that even with legal operations, the extreme volatility of the Bitcoin market makes “successful, legal” mining businesses difficult to sustain. He even suggested that the high level of coordination among so many illegal mining sites points to possible organized crime involvement. This indicates that Malaysian authorities are shifting from tackling a law-and-order issue to examining the broader social and economic risks of mining activities within the country.

The Global Mining Landscape: Malaysia’s Dilemma Is Widespread

Malaysia’s predicament is not unique; it mirrors the complex relationship between Bitcoin mining, energy systems, and regulatory frameworks worldwide. According to the latest Cambridge Centre for Alternative Finance report, over 75% of global Bitcoin mining power is now concentrated in the United States, thanks to transparent regulation, abundant energy (including excess natural gas and renewables), and large-scale professional investment. However, in many developing countries and regions with weak power infrastructure, illegal or semi-legal mining persists.

At the heart of this phenomenon is a mismatch of incentives. The Bitcoin network’s design rewards miners who find the cheapest electricity. In areas with widespread power subsidies, lax enforcement, or corruption, electricity theft for mining becomes a “rational” economic choice. This not only consumes electricity that could support public welfare or industrial development, but also raises residential power costs and forces ordinary taxpayers to foot the bill for massive losses.

On a broader level, Malaysia’s crackdown is part of a global trend of the cryptocurrency mining industry moving toward “compliance” and “institutionalization.” As Bitcoin gains acceptance from mainstream financial institutions, the ethics and environmental impact of its production process are coming under greater scrutiny. In the future, a sustainable mining industry will inevitably be built on legally acquired electricity, the use of clean energy, and full tax compliance. Malaysia’s “cat-and-mouse game” is actually a vivid scene of the intense conflict between old gray-area models and the new era’s strict compliance requirements.

How Bitcoin Mining Works & Common Patterns of Illegal Mining Worldwide

How does Bitcoin mining work?

Simply put, Bitcoin mining is a process that maintains network security and validates transactions through computing power competition. Miners around the world use specialized ASIC mining rigs to solve complex cryptographic puzzles. The first miner to solve the puzzle gets to package a batch of transactions into a “block” on the Bitcoin blockchain, earning newly generated bitcoins (the “block reward”) and transaction fees as a reward. This process consumes enormous amounts of electricity to power and cool the mining rigs, making electricity costs the core variable in mining operations.

Common Patterns of Illegal Cryptocurrency Mining Worldwide

Stealing Power from the Grid: The most common pattern—directly tapping into national or municipal power grids illegally, bypassing meters or tampering with them. The Malaysian case is typical.

Stealing Power from Businesses or Institutions: Secretly connecting mining rigs in universities, factories, government buildings, etc., using their stable power supply and relatively hidden environments.

Using Hacking Techniques to Infect Devices: Launching cyberattacks to implant mining malware in others’ personal computers, servers, or even IoT devices, covertly consuming others’ electricity and computing power (“cryptojacking”).

Abusing Subsidized Energy: Mining in areas with heavy electricity subsidies (such as some oil-producing countries), consuming subsidized public resources at extremely low legal costs.

Secret Operations in Banned Regions: Continuing to operate in countries or regions where cryptocurrency mining is explicitly banned, using bribery and covert locations.

As drones sweep over the rooftops of abandoned malls in Malaysia, the flicker seen through thermal imaging is not just illegal mining rigs, but a lingering shadow from the wild growth era of cryptocurrency. The $1.1 billion hole in electricity bills measures not just the scale of power theft, but also the persistent gap between emerging industries and old infrastructure and regulatory systems. Malaysia’s comprehensive crackdown signals that the days of easy, gray-area profits in the global mining industry are rapidly ending. The outcome of this “cat-and-mouse game” may not be total victory or defeat, but rather a forced evolution of the industry toward greater transparency, compliance, and sustainability. For the Bitcoin network, the final destination of its computing power should not be legal blind spots and broken power grids, but energy measured clearly and paid for fairly in the open. This is a challenge every crypto project seeking long-term growth must answer.