A new report by the ACCESS Blockchain Association of Malaysia predicts a sharp rise in legal mining activity, driven by infrastructure investment, expanding data center capacity, and increased institutional interest.
Yet, electricity theft tied to illegal mining operations continues to erode grid stability and investor confidence.
According to the report, the national utility provider Tenaga Nasional Berhad (TNB) stated that Malaysia suffered power losses exceeding RM441 million ($100M) between 2020 and 2024, largely due to unauthorized mining setups siphoning electricity directly from the grid.
These illicit operations, often concealed in residential or commercial buildings, not only endanger public safety but also place additional stress on the country’s power infrastructure.
The ACCESS report notes that Malaysia has the potential to benefit economically from crypto mining, but must first resolve internal regulatory and infrastructural challenges to fully realize that opportunity.
Malaysia’s Mining Growth Potential Undermined by Regulatory Gaps and Illicit Activity
Malaysia’s persistent regulatory ambiguity and hidden illegal operations continue to stall the progress of its cryptocurrency mining industry, according to a new report by the ACCESS Blockchain Association.
The report estimates that formalizing the sector could lead to RM700 million in hardware and infrastructure investments this year alone, creating up to 4,000 jobs and contributing approximately RM150 million in annual tax revenue.
Despite these prospects, many legal operators remain under the radar due to security concerns and policy uncertainty.
Source: ACCESS Blockchain Association
Malaysia currently ranks among the top 10 countries globally by Bitcoin hash rate share. The country’s competitive industrial electricity rates, particularly in East Sarawak, have made it an attractive destination for crypto mining.
However, the absence of a mining-specific license continues to hamper broader industry development.
While the Securities Commission (SC) oversees digital asset trading and custody, no regulatory body governs the mining process.
This has left industry participants facing unclear electricity tariffs, licensing requirements, and environmental compliance standards.
“Crucially, while the SC regulates the digital assets that miners produce, if deemed securities and traded or offered in Malaysia—its current guidelines do not appear to provide a specific regulatory framework or licensing regime for the act of mining itself,” the report noted.
“The focus remains on the exchange, offering, and safekeeping of assets post-creation. This lack of a dedicated mining framework is a major source of regulatory uncertainty.”
Urgent Need for Reform to Tackle Illegal Mining and Build a Sustainable Industry
Malaysia’s mining industry mirrors a regional pattern. Countries like Thailand and Indonesia are also grappling with illegal operations and infrastructure abuse.
According to a report, incidents of power theft linked to unauthorized mining operations jumped nearly 300% between 2018 and 2024, with 2,397 cases recorded.
The spike has drawn concern from Tenaga Nasional Berhad (TNB), the national utility provider, and threatens to undercut investor confidence in the digital asset sector’s long-term viability.
The ACCESS report recommends a coordinated strategy that includes the introduction of dedicated mining licenses, reforms to landlord liability laws, and energy pricing models tied to sustainability metrics.
While TNB has initiated efforts to roll out smart meters and deploy data analytics tools to detect unauthorized consumption, enforcement remains fragmented across multiple government bodies, weakening overall deterrence.
One of the report’s key proposals is the development of Shariah-compliant mining models. Given Malaysia’s leadership in Islamic finance, the report suggests leveraging this advantage by creating ethical mining operations that prioritize transparent governance and renewable energy.
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