Illegal Bitcoin Mining Is Draining Millions from Malaysia’s National Company

Malaysia‘s national electricity provider, Tenaga Nasional Berhad (TNB), recently disclosed that it has incurred losses surpassing 440 million ringgit (approximately $101 million) as a result of electricity theft linked to illegal Bitcoin mining operations. It is reported that this trend, which began in 2020, has had a profound impact on TNB’s financial health, with a recorded loss of 103 million ringgit in 2023 alone.

A historical overview of TNB‘s financial records reveals a consistent uptick in losses due to crypto mining over the years. The initial impact in 2020 showed losses of 5.9 million ringgit. However, by 2021, these losses surged to 140.4 million ringgit, followed by a recorded loss of 124.9 million ringgit in 2022, and 67.1 million ringgit last year. Earlier this year, TNB reported cumulative losses of over $755 million linked to illegal Bitcoin mining from 2018 to 2023, reflecting the considerable strain this illicit activity has placed on Malaysia’s electricity provider.

Acknowledging the severity of the issue, Akmal Nasir, Malaysia‘s Deputy Minister of Energy Transition and Water Transformation, pointed out that while crypto mining constitutes a minor share of the country’s total energy consumption, its financial implications are substantial. The unauthorized nature of this electricity usage has resulted in significant losses, especially for an entity like TNB, which is crucial to Malaysia's national energy infrastructure.

Authorities have not only been monitoring the financial impacts of illegal mining but also acting on the associated illicit activities. Law enforcement agencies recently seized electrical items valued at nearly $500,000, all connected to illegal mining setups. Additionally, they initiated a comprehensive crackdown targeting tax evasion in the digital asset sector, further intensifying efforts to curb this problem.

The Director of Malaysias Criminal Investigation Department, Suhai Rizain, noted that the department plans to delve deeper into the patterns of these illegal mining activities, especially focusing on the factors that contributed to the spike in losses observed between 2022 and 2023. The growing sophistication of these operations has driven the department to implement strategic interventions to counter the threat posed by illegal Bitcoin mining.

The nature of illegal Bitcoin mining typically involves utilizing unauthorized electricity to power high-performance computers that solve complex algorithms, enabling miners to generate Bitcoin. These operations consume considerable amounts of electricity, and without proper payment for this power usage, the activity directly translates to theft, impacting TNB and by extension, Malaysias economy.

As illegal mining activity continues to pose challenges for utility providers, TNB and law enforcement agencies are committed to addressing the issue, not only through regulatory measures but also by strengthening investigative efforts to mitigate financial losses and protect Malaysias energy resources.