Rampant electricity theft by illegal miners, inconsistent policies, and a lack of legal clarity deter Malaysia from tapping the underlying economic potential of cryptocurrency mining, according to an industry report released by the Access Blockchain Association of Malaysia.
The report predicts that Malaysia’s crypto mining market will grow 110.2% in 2025 — from $2.44 billion to $5.13 billion — catalyzed by its strategic location, growing tech ecosystem and expertise in Shariah-compliant finance. However, the report suggests the country must iron out several internal factors to maintain sustained growth.
A parallel economy of illegal miners
Malaysian multinational electricity company, Tenaga Nasional Berhad (TNB), lost 441.6 million Malaysian ringgits ($104.2 million) to electricity theft between 2020 and September 2024, which the company attributed mainly to illegal Bitcoin (BTC) mining. Previous losses from 2018 to 2021 reached 2.3 billion ringgits ($542 million).
The report highlighted Malaysia’s “latent demand” and the need for a regulated, incentivized environment to tap into the capital lost to unlicensed crypto mining:
“Formalizing this (illegal mining) activity would transform stolen energy into legitimate revenue for TNB and generate taxable income for the government.”
The report added that Malaysia can build a consistent multimillion-dollar revenue stream from crypto mining if it can onboard a fraction of the illegal operators to metered connections.
Legal miners operate in the shadows
While the government has previously assumed legal crypto miners were scarce, the report found that several medium- and large-scale legal operators already exist in Malaysia. However, they avoid publicity due to concerns over cyberattacks, physical theft and sudden regulatory shifts.
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Firms like Hatten Land have begun exploring above-ground mining infrastructure, including partnerships in Melaka with players such as Hydra X and Frontier Digital Asset Management. “Companies like Hatten Land have already signaled partnerships involving thousands of rigs,” the report stated.
Due to its strong internet connectivity and abundant hydropower, Malaysia is well-positioned to tap into the nearly $3 billion crypto mining market. However, the Securities Commission, which currently regulates crypto exchanges, has no specific framework for mining.
According to the report, Malaysia ranks 7th to 8th globally by hashrate, contributing around 2.5% to 3% of Bitcoin mining.
Policy recommendations include creating a mining-specific license, introducing green tariff initiatives, closing legal loopholes in electricity theft and developing Shariah-compliant mining models.
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