In Malaysia’s illegal Bitcoin (BTC) mining hotspots, the hunt begins in the sky.
Drones buzz over rows of shops and abandoned houses, sweeping for pockets of unexpected heat, which is the thermal signature of machines that shouldn’t be running.
On the ground, police carry handheld sensors that sniff out irregular power use. Sometimes the pursuit is more low-tech: residents call in with complaints of strange bird noises, only for officers to discover nature sounds being used to mask the roar of machinery behind closed doors.
The surveillance net exists because the scale of the problem demands it. As a local news outlet reported, between 2020 and August 2025, authorities caught 13,827 premises stealing electricity for crypto mining, mostly Bitcoin.
Losses are pegged at roughly 4.6 billion ringgit, worth about $1.1 billion, according to state-owned energy company Tenaga Nasional (TNB) and the Energy Transition and Water Transformation Ministry.
By early October, with Bitcoin hitting record highs before collapsing by more than 30% and rebounding, authorities had logged around 3,000 power-theft cases tied to mining.
The miners they’re chasing are careful. They hop from empty storefronts to deserted houses, installing heat shields to cloak the glow of their rigs.
They equip entrances with CCTV cameras, heavy-duty security, and broken-glass deterrents to keep unwanted visitors out.
This cat-and-mouse game has been running for years, but the numbers suggest it’s accelerating.
TNB has reported that crypto-linked electricity theft rose nearly 300% over the past six years, with cumulative losses of roughly 3.4 billion ringgit between 2018 and 2023 alone.
Adding earlier years, the true bill from Bitcoin power theft inches closer to 8 billion ringgit. In Perak, landlords have been left with millions in unpaid TNB bills because tenants ran illegal mining operations and walked away, forcing owners to either chase them or absorb the charges.
The sensor grid behind the crackdown
What began as simple meter checks has evolved into a multi-layered surveillance operation.
TNB’s control room now watches transformer-level smart meters for unexplained losses.
These Distribution Transformer Meters, part of a pilot program, record the amount of power flowing into a neighborhood circuit in real time.
If the sum of the customer meters underneath looks too low, operators know power is being diverted somewhere in that cluster.
Anomalies kick out a list of target streets. Teams then overfly those streets with thermal drones at night and walk them with handheld load sensors. That turns what used to be “knock and peek behind every roller shutter” into a guided search.
The drones pick up heat signatures from suspected mining clusters, and the sensors confirm irregular draws.
A 2022 Tenaga briefing already described the use of drones alongside conventional meter inspections, which gives the operation a clear arc: basic enforcement first, then data-driven monitoring as the problem scales.
The utility has also built an internal database that links suspicious premises to owners and tenants.
The energy ministry says that the database is now the reference point for inspections and raids tied to Bitcoin-related power theft.
It addresses a persistent enforcement problem: equipment is often registered to shell entities, and premises are rented or sublet, which dilutes conviction risk even when raids succeed.
On Nov. 19, the government rolled out a cross-agency special committee staffed by the Finance Ministry, Bank Negara Malaysia, and TNB to coordinate a crackdown. The deputy energy minister, Akmal Nasrullah Mohd Nasir, who chairs the panel, frames the risk as existential.
In a recent report by Bloomberg News, he stated:
“The risk of allowing such activities to happen is no longer about stealing. You can actually even break our facilities. It becomes a challenge to our system.”
Overloaded transformers, fires, and localized blackouts are now part of the equation.
There is an open discussion inside that committee about recommending an outright ban on Bitcoin mining, even when operators pay for power.
Nasir is blunt:
“Even if you run it properly, the challenge is that the market itself is very volatile. I don’t see any well-run mining that can be considered as successful legally.”
He has also suggested the pattern of mobile sites points to organized criminal syndicates running the show, adding that it is “clearly run by the syndicate, because of how mobile they are from setting up in one place to another place. It does have modus operandi.”
The economics of meter-tampering
The core economic logic is simple: heavily subsidized grid power, a high-priced asset, and almost no labor.
Malaysia’s domestic tariffs have historically been low, with stepped residential rates starting around 21.8 sen per kilowatt-hour for the first 200 kWh and rising to around 51-57 sen for higher bands.
After a long freeze, the base tariff increased in 2025 to around 45.4 sen per kWh for the 2025/2027 regulatory period, and high-usage customers now face additional surcharges on consumption above 600 kWh a month.
Even so, analysts and crypto sites summarizing the ministry’s numbers describe Malaysia’s effective electricity prices as roughly $0.01-$0.05 per kWh, depending on class and subsidy.
For a miner running dozens or hundreds of ASICs around the clock, the difference between paying even those subsidized tariffs and paying nothing is the difference between marginal profits and very fat ones.
That creates the incentive to bypass meters entirely.
In many raids, investigators find cables tapped directly into overhead lines or incoming mains before the meter, so that the recorded consumption for the property appears to be that of a normal small shop or house while the transformer supplying it runs at several times the expected load.
Akmal has explicitly tied the surge in theft to Bitcoin’s price, noting in July that with BTC above about 500,000 ringgit per coin, more operators are “willing to take the risk of stealing electricity for mining.”
The downside exists, but feels diluted. The Electricity Supply Act allows for fines up to 1 million ringgit and up to 10 years in prison for meter tampering, and police data show hundreds of arrests and tens of millions of ringgit in seized equipment over the last few years.
But syndicate structures soften the blow: equipment is registered to shells, premises are sublet, and the people actually running the rigs are rarely the ones holding the lease.
There’s also a system-level opportunity cost. Malaysia is trying to decarbonize its grid by shifting away from coal toward gas and solar, while also powering a wave of data centers.
Every stolen kilowatt-hour is power that could have gone to paying industrial and digital economy customers instead of subsidizing underground farms.
Where do they go when the lights go out
Locally, the geography of evasion is striking. Illegal miners in peninsular Malaysia hop between empty shoplots, abandoned houses, and partially vacant malls, installing heat shields, CCTV, and even broken-glass strips over entrances to slow down raids.
One viral example was a massive operation in the mostly empty ElementX Mall near the Strait of Malacca, which only cleared out after TikTok footage spread.
In Sarawak, officials have found mining gear hidden in remote logging yards or buildings deep inside forested areas, with direct taps into overhead lines.
What tends to happen after a crackdown is not that miners disappear, but that hash power migrates to the next-cheapest or least-enforced grid.
Globally, the pattern is clear: China’s 2021 mining ban triggered the “Great Mining Migration,” with fleets of machines heading to Kazakhstan, North America, and other energy-rich jurisdictions.
When Kazakhstan later clamped down on unregistered miners and power station kickbacks, some of that hardware moved again, including into Russia and other parts of Central Asia.
In 2025, newer echoes of that same dynamic are playing out across the region. Kuwait is in the middle of a sweeping crackdown, raiding homes that were using up to 20 times the normal amount of electricity and blaming miners for worsening a power crisis.
Laos, which initially courted miners with excess hydropower, is now planning to cut off electricity to crypto operations by early 2026 to redirect power to AI data centers, metal refining, and EV 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 exploit cheap electricity and overbuilt data-center infrastructure in energy-rich provinces.
Malaysia is slotting into this broader pattern. When enforcement tightens in one region with cheap or subsidized power, miners either go further underground in that country, into remote buildings, with better camouflage and more aggressive meter-tapping, or they hop to the next jurisdiction where the math still works, and the risk feels manageable.
Akmal all but spells this out, arguing that the mobility of sites and the speed with which rigs can be moved point to syndicate-style operations rather than hobbyists.
The stakes are no longer just about theft. They’re about whether Malaysia can protect grid infrastructure that is supposed to finance a green transition and a data-center boom, or whether it becomes another way station in the global hunt for cheap electrons, one drone sweep at a time.