According to a Bloomberg News report on December 4th, a crackdown is underway in Malaysia’s hotspots for illegal cryptocurrency mining, with operations conducted from the air.
Drones buzz above rows of shops and abandoned houses, scanning for unexpected heat sources—the heat signals emitted by machines that shouldn’t be running. On the ground, police officers carry handheld sensors to detect unusual electrical activity. Sometimes, the searches are less sophisticated: residents call to complain of strange bird calls, only to discover that police are using natural sounds to mask the noise of machines in hidden locations.
These tools together form a mobile monitoring network to hunt down illegal Bitcoin miners.
The miners they are targeting are proceeding cautiously. They have moved from vacant shops to uninhabited houses, installing heat shields to block the light from their mining machines. They have installed CCTV cameras at entrances, robust security systems, and shatterproof glass barriers to prevent unauthorized entry.
This is a cat-and-mouse game between Bitcoin miners and Malaysian authorities, who have recorded approximately 14,000 illegal mining sites over the past five years. According to the country’s Ministry of Energy, electricity theft has cost the state-owned energy company, Tenaga Nasional Berhad (TNB), about $1.1 billion during this period. And the theft is accelerating—by early October, as Bitcoin’s value hit an all-time high, authorities had recorded approximately 3,000 cases of mining-related electricity theft.
Now, Malaysia is stepping up its efforts. On November 19, the government established an inter-ministerial special committee comprised of the Ministry of Finance, Bank Negara Malaysia (BNM), and TNB. The committee plans to coordinate a crackdown on illegal Bitcoin mining operations.
Deputy Minister of Energy and Water Transformation, and chairman of the committee, Akmal Nasir, said, “The risks of allowing such activities are not limited to theft; our facilities could also be compromised. This poses a challenge to our system.”
Bitcoin mining is a brute-force algorithmic competition. Rows of specialized machines, known as “mining rigs,” perform trillions of calculations per second to verify transactions. If they mine correctly, miners earn Bitcoin. This is big business. Globally, Bitcoin mining consumes more electricity than South Africa or Thailand combined. A report from the Cambridge Centre for Alternative Finance shows that over 75% of this activity currently occurs in the United States. Malaysia’s share in the industry is even more elusive. In January 2022, the country accounted for 2.5% of global hashrate (a measure of computing power).
It’s clear that Malaysian Bitcoin miners have a knack for repurposing unusual spaces.
The Ellimont Mall, overlooking the Straits of Malacca, is a massive commercial complex that was left vacant during the COVID-19 pandemic and has never recovered. Today, much of it still looks like a construction site—the ground is concrete, and electrical wires are exposed. In early 2022, the mall found an unexpected tenant: Bitcoin miners. By early 2025, the mining rigs were gone, but that was after a video of the operation went viral on TikTok.
Bitcoin mining is legal in Malaysia as long as operators obtain electricity legitimately and pay taxes.
Nasir, who participated in several raids last year, was not convinced. At the special committee’s first meeting on November 25, members debated whether a complete ban on Bitcoin mining should be recommended.
He said, “Even if it operates legally, the challenge lies in the extreme volatility of the market itself. I don’t see any mining activity that can be legally considered a successful and well-run operation.”