Widespread electricity theft by illegal crypto miners, coupled with inconsistent regulations and a lack of legal clarity, could hinder Malaysia’s ability to fully capitalize on the potential of cryptocurrency mining, according to a new report by the Access Blockchain Association of Malaysia.
The report projects that Malaysia’s crypto mining industry will expand by 110.2% in 2025 — rising from $2.44 billion to $5.13 billion — driven by the country’s strategic location, expanding tech sector, and expertise in Shariah-compliant finance. However, it emphasizes that Malaysia must address key internal challenges to ensure sustained long-term growth.
An underground economy of illegal miners
Malaysian multinational electricity provider Tenaga Nasional Berhad (TNB) reported losses of 441.6 million Malaysian ringgit ($104.2 million) due to electricity theft between 2020 and September 2024, primarily linked to illegal Bitcoin mining. From 2018 to 2021, these losses totaled 2.3 billion ringgit.
The report emphasized Malaysia’s “latent demand” for cryptocurrency mining and stressed the importance of creating a regulated and incentivized framework to recover capital currently lost to unlicensed mining operations.
“Formalizing this (illegal mining) activity would transform stolen energy into legitimate revenue for TNB and generate taxable income for the government.”
The report further stated that Malaysia could generate a steady multimillion-dollar revenue stream from crypto mining by transitioning even a portion of illegal operators to metered, regulated electricity connections.
Legal miners operate behind the scenes
Although the government has previously believed that legal crypto miners are rare, the report reveals that several medium- and large-scale legal operators are already active in Malaysia. However, these firms keep a low profile due to fears of cyberattacks, physical theft, and sudden regulatory changes.
Companies like Hatten Land have started developing above-ground mining infrastructure, including collaborations in Melaka with partners such as Hydra X and Frontier Digital Asset Management. “Companies like Hatten Land have already announced partnerships involving thousands of rigs,” the report noted.
Thanks to its robust internet infrastructure and abundant hydropower resources, Malaysia is well-positioned to capitalize on the nearly $3 billion crypto mining market. However, the Securities Commission, which currently oversees crypto exchanges, lacks a dedicated regulatory framework for mining activities.
The report notes that Malaysia ranks 7th or 8th globally in Bitcoin hashrate, contributing approximately 2.5% to 3% of total mining.
Key policy recommendations include establishing a mining-specific license, implementing green tariff programs, tightening legal loopholes related to electricity theft, and developing Shariah-compliant mining models.
