Key Takeaways
- Malaysia has lost $1.1 billion in electricity revenue to illegal Bitcoin mining in five years.
- Authorities have tracked nearly 14,000 illicit mining sites and destroyed thousands of rigs, yet the problem persists.
- Countries with cheap electricity, including Iran, Russia, and Paraguay, face similar challenges.
Malaysia is facing a mounting economic problem tied to illegal Bitcoin mining, with officials revealing that power theft linked to unlicensed mining operations has cost the country more than $1.1 billion since 2020.
Despite raids, arrests, and the destruction of thousands of rigs, enforcement agencies say the activity continues to spread faster than they can contain it.
The new figures highlight how Bitcoin mining has become a national headache for countries with cheap or subsidized electricity.
Malaysia Identifies Nearly 14,000 Illegal Crypto Mining Sites
According to the Ministry of Energy, national utility Tenaga Nasional Berhad (TNB) has recorded approximately 13,827 illegal crypto-mining sites that tampered with or bypassed electricity meters between 2020 and August 2025.
The offenders typically siphoned electricity directly from distribution lines or rewired meters to avoid detection — methods that fall under criminal offenses in Malaysia’s Electricity Supply Act.
Enforcement agencies have stepped up coordinated raids over the past year.
Police, regulators, and anti-corruption officials have seized crypto mining machines, shut down operations, and arrested operators.
Still, the government admits that the scale of illegal activity remains vast.
To counter the problem, officials say they have built a centralized database tracking property owners and tenants flagged for power theft tied to Bitcoin mining — an attempt to identify recurring offenders and prevent operations from resurfacing under new names.
Despite periodic demolitions of illegal rigs and increased surveillance, the losses continue to grow.
Cheap Electricity Makes Countries Vulnerable
Malaysia is far from alone.
Around the world, countries that offer low-cost or subsidized power have become hotspots for illegal crypto mining.
The combination of weak regulatory oversight and lucrative arbitrage opportunities has led to widespread electricity theft, power shortages, and grid instability.
Here are some of the worst-hit nations:
Russia
Even after legalizing Bitcoin mining in 2024, Russia has struggled to contain unlicensed setups, especially in remote regions.
Illegal miners often evade taxes and strain power infrastructure, prompting temporary mining bans in certain districts.
Iran
One of the earliest countries to legalize Bitcoin mining, Iran continues to face massive illegal operations.
Government data suggests 85% of mining in Iran is unlicensed, fueled by some of the world’s most heavily subsidized electricity.
Authorities blame illegal mining for persistent blackouts and grid overload.
Paraguay
Abundant hydropower from the Itaipú Dam has attracted both legal and illegal miners.
Officials estimate that nearly one-third of the national power loss stems from illicit activity, prompting regular seizures of mining equipment.
Kazakhstan
Following China’s 2021 mining ban, Kazakhstan saw an influx of miners.
Many operated illegally, tapping directly into the grid. Despite new licensing rules, enforcement remains insufficient to curb widespread unauthorized practices.
Why Illegal Mining Persists
Underground miners thrive in environments where power is cheap, oversight is weak, and enforcement cannot keep pace with the speed of new installations.
Subsidized electricity, intended for households or industries, becomes a lucrative target.
Experts say this dynamic creates a cycle that is difficult for governments to break:
- Steal electricity.
- Mine profitably.
- Seize equipment.
- Reinstall elsewhere.
In many countries, the penalties for electricity theft are far smaller than the profits made from illegal mining, meaning criminal groups treat equipment seizures as a cost of doing business.
As Malaysia’s latest figures show, the economic impact is becoming too large to ignore.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
Beyond his professional pursuits, Prashant is an avid music enthusiast, often exploring diverse genres to unwind. A sports lover, he has a particular passion for cricket and frequently engages in discussions about the game. His multifaceted interests and sharp journalistic instincts make him a valuable contributor to CCN, where he continues shaping the crypto landscape's narrative.
