Introduction to Illegal Crypto Mining
Malaysia has lost $1.1 billion in electricity revenue to illegal Bitcoin mining in five years. Authorities have tracked nearly 14,000 illicit mining sites and destroyed hundreds of rigs, yet the issue persists. Countries with low-cost electricity, including Iran, Russia, and Paraguay, face similar challenges.
The Scale of the Problem
The latest figures highlight how Bitcoin mining has change into a national headache for countries with low-cost or subsidized electricity. According to the Ministry of Energy, national utility Tenaga Nasional Berhad (TNB) has recorded roughly 13,827 illegal crypto-mining sites that tampered with or bypassed electricity meters between 2020 and August 2025. The offenders typically siphoned electricity directly from distribution lines or rewired meters to avoid detection — methods that fall under criminal offenses in Malaysia’s Electricity Supply Act.
Enforcement Efforts
Enforcement agencies have stepped up coordinated raids over the past 12 months. Police, regulators, and anti-corruption officials have seized crypto mining machines, shut down operations, and arrested operators. Still, the federal government admits that the size of criminal activity stays vast. To counter the issue, officials say they’ve built a centralized database tracking property owners and tenants flagged for power theft tied to Bitcoin mining — an try to discover recurring offenders and stop operations from resurfacing under latest names.
Global Impact
Malaysia is way from alone. Around the world, countries that supply low-cost or subsidized power have change into hotspots for illegal crypto mining. The combination of weak regulatory oversight and lucrative arbitrage opportunities has led to widespread electricity theft, power shortages, and grid instability. Some of the worst-hit nations include Russia, Iran, and Paraguay.
Countries Affected by Illegal Mining
Russia has struggled to contain unlicensed setups, especially in distant regions. Illegal miners often evade taxes and strain power infrastructure, prompting temporary mining bans in certain districts. Iran continues to face massive illegal operations, with government data suggesting 85% of mining in Iran is unlicensed, fueled by among the world’s most heavily subsidized electricity. Authorities blame illegal mining for persistent blackouts and grid overload. In Paraguay, abundant hydropower from the Itaipú Dam has attracted each legal and illegal miners. Officials estimate that just about one-third of the national power loss stems from illicit activity, prompting regular seizures of mining equipment.
The Cycle of Illegal Mining
Experts say that subsidized electricity, intended for households or industries, becomes a lucrative goal. The dynamic creates a cycle that’s difficult for governments to interrupt: steal electricity, mine profitably, seize equipment, and reinstall elsewhere. In many countries, the penalties for electricity theft are far smaller than the profits comprised of illegal mining, meaning criminal groups treat equipment seizures as a price of doing business.
Conclusion
The economic impact of illegal crypto mining is becoming too large to disregard. As Malaysia’s latest figures show, the losses proceed to grow despite periodic demolitions of illegal rigs and increased surveillance. The problem persists, and it is crucial for governments to seek out effective solutions to combat illegal crypto mining and stop further economic losses.
