Electricity Theft for Cryptocurrency Mining Becomes a Serious Problem for Southeast Asia

The theft of electricity for cryptocurrency mining is increasingly impacting the energy systems of Southeast Asian countries: illegal farms overload networks, cause damage to energy companies, and create new risks for authorities in terms of control and security.

At the end of July, Malaysian police discovered 71 mining devices operating around the clock at four sites in the southern state of Johor. Law enforcement detained three suspects and seized computers, routers, and other equipment used for Bitcoin mining.

Johor state police chief Ab Rahaman Arsad reported that electricity was connected bypassing the meters. The damage was estimated at $16,600 in just one month. Meanwhile, the illegal farm itself could generate over $20,000 monthly.

In Malaysia, thousands of similar incidents have already led to investigations into illegal cryptocurrency mining, noted Sonny Zulhuda, a lecturer at the International Islamic University of Malaysia.

The problem has long transcended a single country. The region is increasingly identifying groups that deliberately steal electricity to power mining equipment: they connect bypassing meters, interfere with the operation of measuring devices, or exploit access from individuals familiar with the network infrastructure. Cryptocurrency itself is not prohibited, nor is mining, but the legality of such activities hinges on a simple condition: electricity is paid for, and equipment operates without hidden connections and accompanying criminal schemes.

Illegal mining causes billion-dollar losses for energy companies

In Malaysian terms, the incident in Johor is not considered significant. The scale of the problem is well illustrated by the numbers:

• 2018: 610 registered cases of electricity theft.
• 2020-2025: Tenaga Nasional Berhad identified about 14,000 cases of electricity theft related to cryptocurrency mining.
• 2024: the number of such cases rose to 2,397.
• Total damage: over $1.2 billion.

The Malaysian Ministry of Energy considers such connections a threat to public safety, economic stability, and the reliability of the national energy system. For networks, this means not only financial losses: illegal farms increase the load on transformers, raise the risk of accidents, and can provoke outages where consumption is already close to the limit.

The losses are not limited to energy companies' bills. The government has to spend more resources on investigations, raids, and network upgrades, while illegal sites evade taxes and make the market less transparent.

Authorities emphasize: mining digital assets as an activity is not a crime. The danger arises where miners connect to networks illegally, mask consumption, and use infrastructure for dubious operations. In Malaysia, illegal mining is increasingly linked to online casinos, money laundering, and internet fraud networks operating in various Southeast Asian countries.

The most notable incidents in the region look like this:

• Cambodia, 2025: The United States and the United Kingdom imposed sanctions on the Cambodia-registered Prince Group. The company is suspected of creating fraudulent schemes and laundering money through cryptocurrency. U.S. authorities also seized Bitcoin worth approximately $15 billion from the digital wallets of Chen Zhi, who was arrested and extradited to China.
• Thailand, 2025: The Department of Special Investigations in Thailand uncovered and shut down three major illegal cryptocurrency mining networks, confiscating at least 6,300 mining machines. The damage to the energy company was estimated at over $28 million.
• Indonesia, 2023: In North Sumatra province, police conducted raids at 10 locations and confiscated over 1,100 Bitcoin mining devices. The state energy company estimated losses over six months to be more than $800,000.

Why Authorities Struggle to Stop Electricity Theft

The response has included several measures:

• Conducting raids at sites with suspiciously high consumption.
• Fines and confiscation of equipment connected to networks illegally.
• Closer coordination between police, energy companies, and anti-corruption agencies.
• Establishing an inter-agency committee in Malaysia.
• Installing smart meters at substations to quickly detect abnormal load spikes.

Identifying such schemes is aided by analyzing electricity bills, monitoring transformer loads, data from smart meters, reports of suspicious activity, and inspections of facilities where equipment operates around the clock and generates a lot of heat.

However, in practice, combating illegal farms remains challenging. Equipment can be quickly moved, site owners often act anonymously, and tampering with meters may require assistance from individuals familiar with the network infrastructure.

Legal regulation still lags due to gaps in the legislative framework and limited capabilities of investigative and law enforcement agencies, says Saidhal Razalli Azzuhri, a telecommunications expert from the University of Malaysia. According to him, this is particularly noticeable against the backdrop of the rapid development of the country's digital infrastructure.

Malaysia continues to build a legal framework to combat crimes in the digital environment. In June, Parliament passed a law on digital crimes, and two years earlier, the country introduced a cybersecurity law.

Saidhal Razalli Azzuhri believes that raids alone are insufficient. They need to be supplemented with technical measures: monitoring transformers, analyzing banking transactions, and a mandatory permitting system for those engaged in mining.

Balancing Technology Development and Energy Security

Experts warn: Southeast Asian countries must not send the wrong signal to the market. The fight against illegal connections should not appear as a ban on blockchain or digital technologies in general. The authorities' task is to separate legitimate businesses from schemes where electricity is effectively stolen from the state, companies, and consumers.

The goal is not to ban blockchain technology. It is important to ensure that cryptocurrency miners honestly pay their electricity bills and do not create additional risks for society, emphasized Sonny Zulhuda.

The same logic is important for Russia, where the issue of energy security is directly related to the load on networks in regions with high interest in digital asset mining. Irkutsk region, Zabaykalsky Krai, and Buryatia often feature in discussions about mining due to accessible electricity and increased demand for capacity. In such conditions, the attention of the Government of the Russian Federation, the Ministry of Energy of the Russian Federation, and the State Duma to industry regulations seems justified.

It is fundamentally important for the market that regulation does not confuse legal mining with resource theft. If connections to networks are made illegally, it is no longer about the development of the digital economy, but about violations that may involve the Criminal Code of the Russian Federation and lead to criminal liability. This is particularly sensitive for small miners: as electricity costs rise and competition with large platforms increases, illegal connections quickly turn a questionable economy into a risk of criminal prosecution. The experience of Southeast Asian countries shows that the faster the demand for computing power grows, the more important transparent rules, consumption control, and the inevitability of punishment for electricity theft become.

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