Bitcoin mining is a competition of brute force arithmetic. | Photo credit: Dado Ruvic
Drones buzz over rows of shops and abandoned houses, looking for places of unexpected heat, the thermal signature of machines that shouldn’t be running. On the ground, the police have hand sensors that detect irregular power consumption. Sometimes the chase is more low-tech: Residents call complaining about strange bird sounds, only for officers to discover that nature sounds are being used to mask the roar of machines behind closed doors.
Together, the tools form a roving surveillance net in pursuit of illegal Bitcoin miners.
The miners chasing them are cautious. They hop from empty storefronts to abandoned houses and install heat shields to disguise the glow of their installations. They equip the entrances with CCTV cameras, heavy security and broken glass deterrents to keep out unwanted visitors.
This is the cat-and-mouse game between Bitcoin miners and Malaysian authorities, who have registered around 14,000 illegal mining sites in the past five years. According to the Ministry of Energy, power theft has caused about $1.1 billion in losses to state-owned energy company Tenaga Nasional (TNB) during that time. And it’s accelerating – by early October, when Bitcoin was hitting record highs (before collapsing more than 30 percent and bouncing back), authorities had recorded some 3,000 cases of power theft linked to mining.
Now Malaysia is stepping up its response. On November 19, the government set up a special inter-agency committee staffed by the Ministry of Finance, Bank Negara Malaysia and TNB. The task force plans to coordinate the crackdown on rogue operators.
“The risk of allowing such activities is no longer about stealing,” said Akmal Nasrullah Mohd Nasir, the deputy minister of energy transition and water transformation, who chairs the panel. “You can even destroy our facilities. It will be a challenge for our system.”
Throwing the dice
Bitcoin mining is a competition of brute force arithmetic. Racks of specialized machines called “rigs” spit out trillions of calculations per second in the hope of validating transactions. If they do well, the miners earn coins.
It’s big business. Globally, Bitcoin mining uses more electricity than the total consumption in South Africa or Thailand. According to a report from the Cambridge Center for Alternative Finance, more than 75 percent of that activity now takes place in the US. The Malaysian part of the industry is a bit more opaque. In January 2022, the country was responsible for 2.5 percent of the global hashrate – a measure of computing power – but Cambridge did not publish updated data for its latest research.
What is clear is that miners in Malaysia have a knack for repurposing unusual spaces.
Overlooking the Strait of Malacca stands ElementX Mall, a colossal complex that emptied itself during the Covid-19 pandemic and never recovered. Today, much of it still looks like a construction site, with bare concrete floors and exposed wiring. In early 2022, the mall found an unlikely tenant: Bitcoin miners. By early 2025, the installations were gone, but only after a TikTok video of the operation went viral.
Hundreds of kilometers east, in Sarawak, similar high-profile operations exist. A company called Bityou has set up a mining farm on a former logging site, Bloomberg News previously reported. Bityou declined to comment for this story.
Legal, but exhausting
Bitcoin mining in Malaysia is legal as long as operators obtain power and pay taxes properly.
Akmal, who took part in several raids last year, is not convinced. During the special committee’s first meeting on November 25, members debated whether to recommend banning Bitcoin mining entirely.
“Even if you manage it well, the challenge is that the market itself is very volatile,” he said. “I don’t see any well-managed mining industry that can be legally considered successful.”
He went even further and suggested that the sheer number of illegal Bitcoin mining sites and the behavioral patterns of the people behind them point to the involvement of organized crime.
“It is clearly run by the syndicate because of the mobile way they can move from one place to another,” Akmal said. “It does have a modus operandi.”
More stories like this are available at bloomberg.com
Published on December 4, 2025
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