In Malaysia it is illegal Bitcoin (BTC) mining hotspots, and the search for the sky begins.
Drones fly over rows of abandoned stores and homes, scanning pockets of unexpected heat, the thermal signature of machines that shouldn’t be running.
On the ground, police carry portable sensors that identify irregular energy use. Sometimes the hunt is less technical: residents call to complain about strange bird noises, only for officers to discover that nature sounds are being used to mask the roar of machinery behind closed doors.
The monitoring network exists because the scale of the problem demands it. As a local media outlet reported, between 2020 and August 2025, the authorities 13,827 buildings caught Stealing electricity for cryptocurrency mining, mostly Bitcoin.
Losses are estimated at about 4.6 billion ringgit, equivalent to about $1.1 billion, according to state-owned energy company Tenaga Nasional (TNB) and the Ministry of Energy and Water Conversion.
By early October, as bitcoin reached record levels before collapsing more than 30% and rebounding, authorities recorded about 3,000 cases of mining-related energy theft.
The miners who chase them are wary. They jump from empty storefronts into abandoned homes, installing heat shields to mask the glare of their platforms.
They outfit the entrances with CCTV cameras, heavy-duty security, and broken glass barriers to keep out unwanted visitors.
This game of cat and mouse has been going on for years, but the numbers suggest it is accelerating.
Cryptocurrency-related electricity theft has risen by nearly 300% over the past six years, with cumulative losses of about 3.4 billion ringgit between 2018 and 2023 alone, TNB reported.
Adding up the previous years, the real bill from Bitcoin power theft is closer to 8 billion ringgit. In Perak, landlords were left with millions in unpaid National Bank of Turkey bills because tenants ran illegal mining operations and moved out, forcing landlords to either chase them or absorb the fees.
The sensor network behind the crackdown
What started as a simple check of meters has evolved into a multi-layered monitoring process.
TNB’s control room is now monitoring smart meters at transformer level for unexplained losses.
These distribution transformer meters, part of a pilot program, record the amount of power flowing to an adjacent circuit in real time.
If the sum of a customer’s meters below it looks too low, operators know that power is being diverted somewhere in that group.
Anomalies throw out the list of targeted streets. Teams then fly over those streets with thermal drones at night and walk them using portable load sensors. This turns what was previously a matter of “knocking and peeking behind every shutter” into a directed search.
Drones pick up thermal signatures from suspected mining pools, and sensors confirm irregular withdrawals.
The 2022 Tenaga briefing already described the use of drones alongside traditional meter inspections, giving the process a clear arc: basic enforcement first, then data-driven monitoring as the problem worsens.
The tool has also built an internal database linking suspicious buildings to owners and tenants.
The Department of Energy says the database has now become the reference point for inspections and raids associated with bitcoin-related energy theft.
It addresses a persistent enforcement problem: equipment is often registered to shell entities, and premises are rented or sublet, reducing the risk of conviction even when raids are successful.
On November 19, the government formed a special inter-agency committee comprising the Ministry of Finance, Bank Negara Malaysia and TNB Bank to coordinate the campaign. Deputy Minister of Energy, Akmal Nasrallah Muhammad Nasser, who heads the committee, believes that the danger is existential.
In a recent report by Bloomberg News, he said:
“The risk of allowing such activities to occur is no longer about theft. You can actually destroy our facilities. That becomes a challenge to our system.”
Overloaded transformers, fires and local power outages are now part of the equation.
There is an open debate within that committee about recommending an outright ban on Bitcoin mining, even when operators pay for the power.
Nasser in a sharp voice:
“Even if you manage it properly, the challenge is that the market itself is very volatile. I don’t see any well-managed mining that can be considered legally successful.”
He also suggested that the pattern of the mobile sites suggested organized criminal gangs running the show, adding that “it is clearly run by the syndicate, because of the extent to which they move from place to place. They have a modus operandi.”
Economics of meter manipulation
The basic economic logic is simple: a heavily subsidized power grid, expensive assets, and almost no labor.
Domestic tariffs in Malaysia have been historically low, with incremental residential rates starting at around 21.8 sen per kWh for the first 200 kWh and rising to around 51-57 sen for higher ranges.
After a long freeze, the basic tariff increased in 2025 to around 45.4 sen per kWh for the 2025/2027 regulatory period, and customers with high usage now face additional charges for consumption above 600 kWh per month.
However, analysts and cryptocurrency websites summarizing the ministry’s figures describe actual electricity prices in Malaysia as between $0.01 to $0.05 per kilowatt hour, depending on the category and support.
For a miner running dozens or hundreds of ASIC chips around the clock, the difference between paying even those supported tariffs and paying nothing is the difference between marginal profits and very large profits.
This creates an incentive to bypass the counters entirely.
In many raids, investigators have found cables connected directly to overhead lines or incoming electricity mains ahead of the meter, so that the property’s recorded consumption looks like that of an ordinary convenience store or home while the transformer supplying it operates at several times the expected load.
Akmal has explicitly linked the rise in theft to the price of bitcoin, noting in July that with the price of bitcoin above about 500,000 ringgit per coin, more operators are “willing to take the risk of electricity theft for mining.”
The downside is there, but it seems mitigated. The Electricity Supply Act allows for fines of up to 1 million ringgit and up to 10 years in prison for meter tampering, and police data shows hundreds of arrests and tens of millions of ringgit in confiscated equipment over the past few years.
But union structures soften the blow: equipment is registered as structures, buildings are subleased, and the people running the rigs rarely own the lease.
There is also a system-level opportunity cost. Malaysia is trying to decarbonize its grid by switching from coal to gas and solar, while also commissioning a wave of data centres.
Every stolen kilowatt-hour is energy that could have gone to paying customers of the industrial and digital economy instead of supporting underground farms.
Where do they go when the lights go out?
At the local level, the geography of evasion is striking. Illegal miners in Peninsular Malaysia move between empty shops, abandoned homes and partially vacant shopping malls, installing heat shields, surveillance cameras and even broken glass strips over doorways to slow raids.
One viral example was a large-scale operation at a mostly empty ElementX mall near the Strait of Malacca, which was only taken down after TikTok footage went viral.
In Sarawak, officials found mining equipment hidden in remote logging yards or buildings deep in forest areas, with taps directly into overhead lines.
What happens after the crackdown is not that miners disappear, but that hashing power moves to the next cheaper or less enforced network.
Globally, the pattern is clear: China Mining ban 2021 This led to the “Great Mining Migration,” with fleets of machines heading to Kazakhstan, North America, and other energy-rich regions.
When Kazakhstan later cracked down on unregistered miners and power plant kickbacks, some of these devices moved again, including to Russia and other parts of Central Asia.
In 2025, new echoes of this same dynamic will emerge across the region. Kuwait is witnessing a widespread crackdown, raiding homes that were using up to 20 times the normal amount of electricity, and blaming miners for exacerbating the electricity crisis.
Laos, which was initially courting miners with excess hydropower, now plans to cut power to cryptocurrency operations by early 2026 to redirect power to artificial intelligence data centers, metal refining and electric vehicle manufacturing.
China itself, despite its 2021 ban, has seen underground mining rebound to an estimated 14% to 20% of global hashrate by late 2025 as operators take advantage of cheap electricity and redundant data center infrastructure in energy-rich provinces.
Malaysia falls into this broader pattern. When enforcement tightens in one area with cheap or subsidized energy, miners either go further underground in that country, to remote buildings, with better camouflage and more aggressive exploitation of meters, or move to the next jurisdiction where the accounts are still working and the risks appear manageable.
Akmal makes this quite clear, arguing that the mobility of sites and the speed with which drilling rigs can be moved indicate guild-style operations rather than amateurism.
The risks are no longer limited to theft only. It is about whether Malaysia can protect the grid infrastructure that is supposed to fund the green transition and data center boom, or whether it will become another stop in the global search for cheap electrons, one drone at a time.
