Illegal Crypto Mining Threatens Malaysia’s Renewable Energy Ambitions

Kuala Lumpur, Malaysia, June 9, 2025 — Malaysia’s ambition to become a regional leader in renewable energy is being undermined by a surge in illegal cryptocurrency mining, which is siphoning off electricity needed for the country’s sustainable energy transition.

A recent report from the Access Blockchain Association of Malaysia highlights that illicit mining operations are causing financial losses and jeopardizing the nation’s goal of achieving 31% renewable energy in its power generation mix by 2025, a key step toward reducing carbon intensity by 45% from 2005 levels by 2030.

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Electricity Theft Strains Hydropower Resources

Illegal crypto mining operations have cost Malaysia’s state-owned electricity provider, Tenaga Nasional Berhad (TNB), over 500 million ringgit ($116 million) in stolen electricity from 2020 to 2024, with a 300% increase in detected cases since 2018. Much of this stolen power is drawn from Malaysia’s abundant hydropower resources, which account for a significant portion of the country’s renewable energy capacity.

These illicit operations, often bypassing meters or tampering with power lines, overload the grid and reduce the availability of clean energy for households and industries. The environmental toll is substantial: Bitcoin mining globally, including in Malaysia, relies heavily on energy-intensive processes, with hydropower satisfying 16% of Bitcoin’s electricity demand but carrying significant water and ecological impacts.

The strain on hydropower resources is particularly concerning as Malaysia aims to expand its renewable energy infrastructure to meet climate commitments made at COP28. The report warns that without curbing illegal mining, the country risks diverting clean energy away from critical sectors like transportation and manufacturing, which are pivotal for decarbonization.

Did you know?
Bitcoin mining globally produces around 30,700 tons of electronic waste annually, equivalent to discarding thousands of computers and servers, which further strains environmental resources.

Regulatory Gaps Hinder Green Transition

While Malaysia’s strategic location and robust internet connectivity make it an attractive hub for crypto mining, the lack of a specific regulatory framework for mining activities exacerbates the problem. The Securities Commission Malaysia regulates crypto exchanges but has yet to establish clear guidelines for mining, leaving legal operators in a gray area and enabling illegal ones to thrive.

The Access Blockchain Association advocates for a mining-specific license and green tariff initiatives to incentivize sustainable practices, such as using solar or wind power, which could align mining with national energy goals.

Recent enforcement efforts, such as “Ops Token” and nationwide raids shutting down over 2,300 illegal mining setups annually, demonstrate Malaysia’s commitment to tackling electricity theft. However, the environmental cost of unregulated mining remains a hurdle. The report estimates that formalizing these operations could redirect stolen energy into legitimate revenue streams, supporting TNB’s finances and funding further renewable energy projects.

Analytical Insight: Environmental Trade-offs

A 2023 study by the United Nations University revealed that Malaysia ranks among the top 10 countries contributing to Bitcoin’s global environmental footprint, with its mining operations impacting water and land resources due to heavy reliance on hydropower. To offset Malaysia’s share of Bitcoin mining’s carbon emissions, an estimated 200 million trees would need to be planted, covering an area the size of Singapore.

The report points out the urgency of policies that prioritize renewable energy allocation for societal needs over energy-intensive crypto activities. By integrating smart metering and blockchain analytics, Malaysia could enhance detection of illegal mining, ensuring that its hydropower and emerging solar projects support the nation’s 2030 climate goals rather than fueling illicit operations.