The hunt begins from the air at Malaysia’s illegal Bitcoin (BTC) mining hotspots.
Drones fly over rows of stores and abandoned buildings, looking for areas where there is unexpected heat. This is a heat signature of a machine that should not be running.
On the ground, police carry handheld sensors that sniff out irregular power usage. In some cases, more low-tech investigations may be undertaken. Residents complained of strange bird calls, but officers discovered that natural sounds were being used behind closed doors to mask the roar of machinery.
Surveillance networks exist because the scale of the problem requires them. As local news outlets reported, between 2020 and August 2025, authorities caught 13,827 facilities stealing electricity for cryptocurrency mining (primarily Bitcoin).
Losses are expected to be around 4.6 billion ringgit (equivalent to about $1.1 billion), according to state energy company Tenaga Nasional (TNB) and the Ministry of Energy Transformation and Water Transformation.
By early October, authorities had recorded nearly 3,000 mining-related thefts as Bitcoin rebounded, falling more than 30% after hitting an all-time high.
The miners they are chasing are careful. They fly from empty storefronts to deserted homes, installing heat shields to hide the shine on their gear.
Surveillance cameras, tight security, and anti-glass breakers have been installed at the entrance to keep out unwanted visitors.
This cat-and-mouse game has been going on for years, but the numbers suggest it’s accelerating.
According to a TNB report, power theft related to cryptocurrencies has increased by nearly 300% in the past six years, with cumulative losses of about RM3.4 billion from 2018 to 2023 alone.
Add in the previous years and the actual bill for Bitcoin power theft inches closer to RM8 billion. In Perak, landowners have been left with millions of dollars in unpaid TNB bills after their tenants left for illegal mining, forcing them to either pursue the tenants or absorb the bills.
The sensor grid behind the crackdown
What started as a simple meter check has evolved into a multi-layered surveillance effort.
The TNB control room is currently monitoring the smart meters at the transformer level for unexplained losses.
These distribution transformer meters are part of a pilot program and record in real time the amount of power flowing into nearby circuits.
If the total on the customer meter below it is too low, the operator will know that power is being diverted somewhere within that cluster.
The anomaly causes the list of targeted roads to be removed. The team then flies over these roads at night with a thermal drone and roams them using hand-held load sensors. This turns what used to be a “knock and peek behind every roller shutter” requirement into a guided search.
Drones detect heat signatures from suspected mining clusters, and sensors confirm irregular mining.
The 2022 Tenaga briefing has already described the use of drones in parallel with traditional meter inspections, giving a clear flow to the operation, with basic enforcement first and then data-driven monitoring depending on the scale of the problem.
The utility also built an internal database linking suspect properties to owners and tenants.
The Department of Energy says this database is now the reference point for inspections and investigations related to Bitcoin-related power theft.
This addresses persistent enforcement issues. Equipment is often registered with a shell entity and facilities are rented or sublet, reducing the risk of conviction even in the event of a successful raid.
On November 19, the government established a cross-ministerial special committee consisting of the Ministry of Finance, Bank Negara Malaysia, and TNB to coordinate the crackdown. Deputy Energy Minister Akmal Nasrallah Mohd Nasir, who chairs the panel, argues that the risk is existential.
In a recent report by Bloomberg News, he said:
“The risk of allowing such activity is no longer theft; it could actually even destroy our facilities. It becomes a challenge to our systems.”
Transformer overloads, fires, and local power outages are now part of the equation.
There is open discussion within that committee about recommending a complete ban on Bitcoin mining, even when operators pay for electricity.
Nasir says this frankly.
“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 would be considered legally successful.”
He added that the pattern of mobile sites suggested the show was run by an organized crime syndicate, adding: “It’s clearly run by an organization because of how mobile it is from one location to another. There’s certainly a modus operandi.”
The economics of meter tampering
The core economic logic is simple. Heavily subsidized grid electricity is an expensive asset with little labor.
Domestic tariffs in Malaysia are historically low, with tiered residential tariffs starting at around 21.8 sen per kilowatt hour for the first 200kWh, rising to around 51-57 sen for higher bands.
After a long freeze period, the basic rate will be raised to approximately 45.4 sen per kWh in 2025 for the 2025/2027 regulation period, and currently high-volume customers will be subject to additional charges for consumption exceeding 600 kWh per month.
Still, analysts and crypto sites compiling the ministry’s figures say Malaysia’s effective electricity price is around $0.01 to $0.05 per kWh, depending on class and subsidy.
For miners with dozens or hundreds of ASICs running around the clock, the difference between paying even a subsidized fee and paying nothing is the difference between marginal and very large profits.
This creates an incentive to bypass the meter completely.
In many investigations, investigators find cables connected directly to overhead lines or service lines in front of meters. Therefore, the recorded consumption of real estate appears to be that of a normal small shop or residence, while the transformer supplying the power is operating at several times the expected load.
Akmal has explicitly linked the surge in thefts to the price of Bitcoin, noting in July that once Bitcoin exceeds around 500,000 ringgit per coin, more operators are “willing to risk stealing electricity for mining”.
It has its flaws, but they feel diluted. The Electricity Supply Act allows for fines of up to RM1 million and up to 10 years in prison for meter tampering, and police data shows hundreds of people have been arrested and equipment seized worth tens of millions of ringgit over the past few years.
But the syndicate structure softens the blow. The equipment is registered with Shell, the facility is sublet, and the person actually operating the rig rarely holds a lease.
There are also system-level opportunity costs. Malaysia is looking to decarbonize its electricity grid by moving from coal to gas and solar power, while also powering the expansion of data centres.
Every kilowatt-hour stolen is electricity that could have been used to pay customers in the industrial or digital economy, rather than subsidize underground farms.
Where do they go when the lights go out?
Locally, the geography of avoidance is evident. Illegal miners in Peninsular Malaysia move between vacant, abandoned and partially vacant storefronts, installing heat shields, surveillance cameras and even broken glass panels at entrances to slow down attacks.
One viral example was a large-scale operation at the mostly vacant ElementX mall near the Straits of Malacca, which was only taken down after TikTok footage went viral.
In Sarawak, authorities found mining equipment connected directly to overhead wires hidden in remote logging fields and buildings deep in forest areas.
What tends to happen after a crackdown is not that miners disappear, but rather that hashing power moves to the next cheapest or least enforced grid.
Globally, this pattern is clear. China’s mining ban in 2021 triggered a “massive mining exodus,” with fleets of machinery heading to Kazakhstan, North America, and other energy-rich regions.
Later, when Kazakhstan cracked down on kickbacks from unregistered miners and power plants, some of that hardware moved again, including to Russia and other parts of Central Asia.
In 2025, new echoes of the same dynamics are playing out across the region. Kuwait is in the midst of a major crackdown, accusing miners of worsening the power crisis by raiding homes that were using up to 20 times the normal amount of electricity.
Laos initially provided surplus hydropower to miners, but now plans to cut off power to cryptocurrency operations by early 2026 and redirect power to AI data centers, metal refining, and EV manufacturing.
China itself has seen underground mining rebound to an estimated 14% to 20% of global hashrate by late 2025, despite a 2021 ban, as operators exploit cheap power and overbuilt data center infrastructure in the energy-rich province.
Malaysia is becoming integrated into this broader pattern. As a region tightens its grip on cheap or subsidized power, miners either enter remote buildings further underground in the country with better camouflage and more aggressive meter sniffing, or jump to the next jurisdiction where the math still works and the risks feel manageable.
Mr. Akmal explained most of this, arguing that the site’s maneuverability and the speed at which the rigs moved were indicative of a syndicate-style operation rather than a hobbyist one.
Theft is no longer the only danger. The question is whether Malaysia will be able to protect its power grid infrastructure, which is supposed to fund a green transition and data center boom, or whether it will use drones to wipe it out all at once and become a new way station to scour the world for cheap electrons.
(Tag translation) Bitcoin
