Local authorities in Malaysia’s Johor state have shut down two cryptocurrency operations that allegedly stole more than $600,000 worth of electricity over several years.
According to a report published by the local newspaper The Star, a coordinated raid this week targeted two illicit crypto mining sites. The operation was led by the Energy Commission (ST) in collaboration with Tenaga Nasional Berhad (TNB), the Inland Revenue Board and the Iskandar Puteri City Council. Authorities arrested individuals believed responsible for tapping significant amounts of power.
Nazlin Alim Sadikhi, a regional director at the Energy Commission, said one of the mining facilities housed about 100 mining rigs running around the clock for three consecutive years. The second site reportedly contained 48 rigs and had been mining cryptocurrencies for two years. While the operators actually owed nearly $20,000 per month in electricity charges, they were paying only $7 to $14 monthly by bypassing proper metering.
Investigators found evidence of illegal wiring that allowed the operators to siphon power directly from the grid without passing electricity through TNB meters. This type of tampering enabled sustained, unmetered consumption and is a common method used in organized electricity theft tied to cryptomining operations.
Illegal electricity use by crypto miners, particularly for Bitcoin and other energy-intensive coins, remains a recurring problem in Malaysia despite the country generally welcoming crypto mining and trading activities. The Energy Commission has emphasized that while the government supports the growth of the digital asset industry, operators must comply with licensing, taxation and utility regulations.
As part of efforts to support a legitimate market, Malaysian regulators plan to develop a regulatory framework for wallet providers that will be integrated into the country’s existing cryptocurrency laws. This move seeks to strengthen oversight of the ecosystem while reducing incentives for illicit behavior.
Under Section 37 of the Malaysian Electricity Supply Act, individuals who steal electricity outside of a household installation and commit multiple offenses face steep penalties: fines of up to $1.2 million or up to 10 years’ imprisonment. The Star noted that those arrested in this case could face up to 10 years in prison or fines up to $240,000 if convicted on the current charges.
Mohd Satari Mohamad, an engineer with TNB, disclosed that authorities have been conducting raids throughout the year and identified about 90 similar setups during recent enforcement actions. Since 2018, a total of 288 illegal operations have been discovered. TNB data published in June 2019 indicated losses exceeding $25 million in electricity revenue linked to theft, and a targeted enforcement action in August of that year uncovered 33 operations that together had stolen approximately $760,000 worth of power.
The continued pattern of large-scale illegal power tapping highlights the challenges utilities and regulators face as crypto mining grows in regions with comparatively low electricity costs. Authorities in Johor and across Malaysia continue joint efforts to locate, dismantle and prosecute illicit mining operations while working to balance industry development with law enforcement and energy security.