Why Malaysia Could Miss Out on Billions from Crypto Mining Without Clear Regulation

A rising shadow economy of illegal crypto miners threatens to derail Malaysia’s blockchain future, despite the country’s strategic advantages.

A new industry report by the Access Blockchain Association of Malaysia has revealed that rampant illegal crypto mining, inconsistent energy policies, and a lack of regulatory clarity are undermining Malaysia’s potential to capitalize on its crypto mining capacity.

Despite Malaysia’s advantageous location in Southeast Asia, its expanding technological landscape, and its leadership in Shariah-compliant finance, the report warns that without swift policy reform, the country may continue to hemorrhage value to underground miners.

A Growing Shadow Economy Fueled by Power Theft

Malaysia’s national utility company, Tenaga Nasional Berhad (TNB), disclosed staggering losses totaling 441.6 million Malaysian ringgit (approximately $104.2 million USD) due to electricity theft from January 2020 through September 2024—attributed predominantly to illicit Bitcoin mining operations. Between 2018 and 2021, the total theft-related losses climbed to 2.3 billion ringgit.

The report notes that this energy theft masks a powerful underlying demand:

“By regulating and legitimizing these operations, stolen energy could be converted into a reliable revenue stream for TNB and a new tax base for the Malaysian government,” the report argues.

Legal Miners Stay Quiet Amid Risk

Contrary to the belief that legal miners are rare in Malaysia, the report identifies several medium and large-scale players already operating discreetly. Due to fears of cyberattacks, equipment theft, and sudden changes in government policy, these operators have opted to avoid media exposure.

Despite this secrecy, companies such as Hatten Land have started developing above-ground mining hubs, with notable partnerships in Melaka alongside Hydra X and Frontier Digital Asset Management. “Thousands of rigs are already in deployment,” the report confirms.

Missed Opportunity in the Global Mining Market

Malaysia contributes an estimated 2.5% to 3% of global Bitcoin hashrate—ranking around 7th to 8th worldwide. The report estimates the global cryptocurrency mining market is heading toward a valuation near $3 billion by 2034, suggesting Malaysia could secure a significant portion of that if proper policies are introduced.

Despite having a highly connected digital infrastructure and access to low-cost hydropower, Malaysia’s Securities Commission—tasked with regulating crypto exchanges—currently lacks a legal framework for mining activities.

Policy Recommendations for a Regulated Future

The report proposes several key reforms:

• Establishing a mining-specific license category
• Launching green electricity tariff initiatives
• Amending electricity theft laws for modern digital crimes
• Encouraging Shariah-compliant mining investment models

If adopted, these measures could help bring illegal operators into the formal economy, enabling Malaysia to unlock a multi-million dollar annual crypto revenue stream—while also safeguarding energy integrity and public trust.

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