The state utility company, Tenaga Nasional Bhd (TNB), has suffered a financial embezzlement exceeding 1.1 billion dollars due to electricity theft by mining executed between the year 2020 and August of the current cycle. This alarming figure was officially confirmed by the Ministry of Energy Transition and Water Transformation in a recent parliamentary reply this Tuesday.
According to data revealed by authorities, the massive financial damage stems from 13,827 premises that were detected using energy fraudulently. These illicit operations focused primarily on Bitcoin extraction, manipulating meters or making direct illegal connections to the national power grid. To combat this situation, TNB has deployed joint operations with the police, the Energy Commission, and anti-corruption agencies, managing to seize thousands of rigs and shut down numerous establishments that jeopardized the stability of the country’s electricity supply.
Will regulation be able to stop the criminal boom in the Malaysian energy sector?
On the other hand, the problem has escalated dramatically in recent years, recording a 300% increase in energy fraud cases linked to digital assets between 2018 and 2024. Criminal syndicates typically operate from rented commercial premises or discreet residences, installing industrial ventilation systems and soundproofing materials to avoid being detected by neighbors. Thus, these criminal networks consume massive amounts of electricity equivalent to entire residential blocks, changing locations frequently to evade justice and perpetuate electricity theft by mining.
Although the nation positions itself as a global leader in hash rate, the lack of regulatory clarity undermines legitimate growth potential. The ACCESS Blockchain Association estimates that formalizing the sector could attract millionaire investments in infrastructure and generate thousands of formal jobs this year. However, the absence of a specific regulatory body for cryptocurrency mining leaves legitimate operators in legal limbo, facing uncertain tariffs and security risks.
Likewise, experts suggest that the solution lies in the implementation of dedicated mining licenses and reforms in landlord liability laws. The ACCESS organization also proposes the development of mining models that comply with Shariah and prioritize transparent governance. Consequently, establishing a clear legal framework would allow Malaysia to capitalize on its competitive electricity rates, transforming an activity currently clandestine and costly for the state into a regulated source of tax revenue and sustainable technological development.
