A recent study by the ACCESS Blockchain Association of Malaysia forecasts significant growth in legal cryptocurrency mining activities, fueled by investments in infrastructure, an increase in data center capabilities, and rising interest from institutional investors.
However, the ongoing issue of electricity theft linked to illegal mining operations poses a serious threat to grid stability and investor trust.
The report highlights that Malaysia’s national utility company, Tenaga Nasional Berhad (TNB), reported losses exceeding RM441 million (approximately $100 million) from 2020 to 2024 due to unauthorized mining setups diverting power directly from the grid.
These unlawful operations often operate secretly within residential or commercial premises, endangering public safety while also placing an undue burden on the nation’s power infrastructure.
The ACCESS report indicates that while Malaysia stands to gain economically from cryptocurrency mining, it must first address internal regulatory and infrastructure challenges to fully capitalize on this potential.
Regulatory Deficiencies and Illegal Operations Stall Mining Industry Growth
Malaysia’s ongoing regulatory uncertainties and hidden illegal operations continue to hinder the development of its cryptocurrency mining sector, as stated in the ACCESS Blockchain Association’s recent analysis.
The report estimates that bringing the sector into the formal economy could generate RM700 million in investments for hardware and infrastructure within the year, leading to the creation of approximately 4,000 jobs and generating around RM150 million in annual tax revenue.
Despite these opportunities, legitimate operators often remain unregistered due to security concerns and uncertain policies.
Malaysia currently ranks among the top 10 countries worldwide for Bitcoin hash rate share, thanks in part to competitive industrial electricity rates in regions like East Sarawak, which make it appealing for crypto mining ventures.
However, the lack of a specific mining license continues to impede broader advancements in the industry.
While the Securities Commission (SC) is responsible for overseeing digital asset trading and custody, there is no regulatory body governing the mining process itself.
This has resulted in confusion over electricity tariffs, licensing criteria, and environmental compliance standards for industry participants.
“While the SC regulates the digital assets produced by miners, if these assets are classified as securities and traded or offered in Malaysia, its current guidelines do not provide a clear regulatory framework or licensing system specifically for mining itself,” the report asserts.
“Efforts remain focused on exchanges, offerings, and the safeguarding of assets post-creation, leaving a significant gap in a dedicated mining framework that contributes to regulatory uncertainty.”
Call for Reform to Combat Illegal Mining and Foster a Sustainable Industry
Malaysia’s mining challenges reflect a wider regional trend, with neighboring countries like Thailand and Indonesia also grappling with illegal practices and infrastructure misuse.
Reports indicate a staggering increase in power theft associated with unauthorized mining activities, with incidents rising nearly 300% from 2018 to 2024, totaling 2,397 cases.
This alarming trend has raised concerns at Tenaga Nasional Berhad (TNB) and poses a potential risk to investor confidence in the long-term sustainability of the digital asset industry.
According to TNB, illegal crypto mining led to 610 documented cases of power theft in 2018, a figure that surged to 2,397 by 2024, highlighting a significant issue within the sector. #MalaysiaCryptoMining #BitcoinMining #ElectricityConsumption https://t.co/Xmnl4pXXhx
— Finance Newso.com (@Finance Newso) May 12, 2025
The ACCESS report advocates for a comprehensive strategy that includes introducing dedicated mining licenses, reforming landlord liability laws, and creating energy pricing models linked to sustainable practices.
Although TNB has begun implementing smart meters and utilizing data analytics to identify unauthorized electricity use, enforcement remains fragmented across various government entities, undermining overall effectiveness.
One of the report’s principal recommendations is the establishment of Shariah-compliant mining models. Given Malaysia’s prominent position in Islamic finance, there is an opportunity to develop ethical mining operations that emphasize transparent governance and renewable energy practices.
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