Malaysia Faces $103 Million Loss from Crypto Mining: Details

Malaysia's Financial Setback: Impact of Illegal Crypto Mining on TNB

Malaysia has faced a significant financial setback as illegal cryptocurrency mining operations continue to siphon off substantial electricity. Tenaga Nasional Berhad (TNB), the national electricity provider, reported losses amounting to RM 456 million (Malaysian Ringgit) between 2022 and 2023 due to unregistered cryptocurrency mining, primarily focused on Bitcoin. 

This surge in energy theft has intensified over recent years, placing Malaysia alongside other nations dealing with energy strains caused by unregulated digital mining activities.

Growing Energy Theft Amid Rising Crypto Mining

From a modest loss of RM 5.9 million in 2020, the financial impact on Malaysia’s national electricity board has multiplied over time, with reported losses reaching RM 141 million in 2021 and RM 125 million in 2022. The ongoing rise in unlicensed cryptocurrency mining operations poses challenges for TNB and the government as they work to combat power shortages.

TNB’s annual losses linked to crypto mining electricity theft:

• 2020: RM 5.9 million

• 2021: RM 141 million

• 2022: RM 125 million

• 2023: RM 456 million

Experts indicate that crypto miners often target regions with either favorable regulations or lower electricity costs. In Malaysia, enforcement agencies have seized unauthorized Bitcoin mining devices valued at approximately $500,000 in 2023. Several miners have also faced significant fines and penalties as the government intensifies crackdowns on these activities.

Regulatory Efforts to Curb Illegal Mining

Although cryptocurrency mining is legal in Malaysia, authorities require miners to register and adhere to national regulations. The high rate of unregistered miners has escalated government scrutiny on crypto mining. In line with this, TNB is collaborating with law enforcement to curb illegal mining operations, which cause power disruptions and can affect residents' health due to excessive noise and environmental impact.

Additionally, the Central Bank of Malaysia Act designates the ringgit as Malaysia’s sole legal tender, meaning cryptocurrencies lack official recognition despite their legal trade status. This limited acknowledgment further complicates regulatory enforcement.

While Malaysia battles illicit mining, other countries, including the UAE, have adopted crypto-friendly policies to encourage growth in the digital asset industry. The UAE’s Value-Added Tax (VAT) framework, introduced in 2018, applies a 5% VAT on cryptocurrency-related goods and services, fostering economic benefits from the growing sector.