Drones, sensors, and the battle to hunt down illegal "Bitcoin mines" in Malaysia

At illegal Bitcoin mining hotspots in Malaysia, the hunt begins… from above.

Drones sweep over rows of shops and abandoned houses, scanning for unusual heat signatures—a distinctive sign of machines that shouldn’t be operating there.

On the ground, police carry handheld devices to detect abnormal electricity consumption. Sometimes, the search is even simpler: locals call in because they hear “strange bird sounds,” but upon inspection, authorities discover the “natural sounds” are just fake noise used to mask the hum of mining machines behind closed doors.

This surveillance network exists because the scale of the problem has far exceeded all conventional measures. According to local reports, from 2020 to August 2025, authorities have uncovered 13,827 facilities stealing electricity to mine crypto, mainly Bitcoin.

Estimated losses are about 4.6 billion ringgit—equivalent to 1.1 billion USD—according to national utility Tenaga Nasional (TNB) and the Ministry of Energy & Water Transition.

By early October, as Bitcoin hit a peak then plunged over 30% before recovering, authorities had recorded around 3,000 cases of electricity theft related to crypto mining.

These miners are extremely sophisticated. They constantly move between empty shops and abandoned houses; install thermal shields to hide heat signals from the mining machines.

Many sites are equipped with CCTV, reinforced locks, and even booby traps using strips of broken glass to prevent raids.

The chase has lasted for years and is accelerating. TNB reports that electricity theft cases related to crypto have increased nearly 300% over the past six years, with the 2018–2023 period alone causing about 3.4 billion ringgit in damages.

Including previous years, the total loss from illegal Bitcoin mining is approaching 8 billion ringgit. In Perak state, many landlords are left with TNB bills worth millions of ringgit because tenants ran illegal mining operations and then disappeared, forcing the owners to cover the costs.

The sensor network behind the crackdown

Simple meter checks have now become a multi-layered monitoring system.

TNB’s control room now monitors smart meters at the substation level, noting any unexplained electricity losses.

These “Distribution Transformer Meters” in the pilot program measure the amount of electricity supplied to each residential area in real time. If the total consumption of the underlying households is unusually low, it’s a sign that electricity is being siphoned off illegally.

These anomalies generate a list of streets for inspection. From there, patrol teams deploy drones for nighttime thermal scans, combined with handheld load meters. Instead of “knocking on every door,” authorities now have specific targets.

Drones detect hotspots suspected of housing mining machines; sensors verify abnormal electricity “flow.”

TNB has described this system since 2022: starting with manual checks, then shifting to data monitoring as the issue exploded.

The utility has also built an internal database linking suspicious locations to owners and tenants. The energy ministry says this has become the central data source for all inspections and raids related to Bitcoin mining electricity theft.

The biggest problem is unclear identities: equipment registered under “shell” companies, rentals through multiple layers, making prosecution difficult even when machines are seized.

On November 19, the government set up an inter-ministerial task force including the Ministry of Finance, Bank Negara Malaysia, and TNB to coordinate crackdowns. Deputy Energy Minister Akmal Nasrullah Mohd Nasir described the risk as “existential.”

He told Bloomberg:

“The risk now isn’t just electricity theft. They can damage infrastructure. This has become a challenge for the entire system.”

Transformer overloads, fires, and local blackouts are becoming increasingly common.

The committee is discussing a proposal for a total ban on Bitcoin mining—even if electricity is paid for.

Nasir was blunt:

“Even if operated legally, the market is too volatile. I haven’t seen any mining model considered successful within the legal framework.”

He also said the constant movement of mining facilities shows this is the work of organized groups.

The economics of “meter tampering”

At its core, the problem is economic: cheap electricity, high-value assets, nearly zero operating costs.

Malaysia has long maintained low residential electricity tariffs, starting at 21.8 sen/kWh for the first 200 kWh and rising gradually to about 51–57 sen at higher levels, equivalent to about 2,900 – 2,910 VND/kWh.

From 2025, the base price rises to 45.4 sen/kWh, about 3,250 – 3,650 VND/kWh, and heavy users must pay a surcharge for consumption above 600 kWh.

However, according to aggregated analyses, actual electricity prices in Malaysia are only about 0.01–0.05 USD/kWh depending on type and subsidies.

For miners running dozens to hundreds of ASIC machines 24/7, whether to pay or steal electricity determines whether margins are thin or super-profitable.

As a result, they look for ways to bypass the meter.

Many raids have found wires connected directly to the power line before the meter, so recorded consumption appears normal, while the substation bears many times the normal load.

Akmal also pointed out that Bitcoin’s price is the primary driver. When BTC exceeds 100,000 USD, many are “willing to risk stealing electricity.”

Penalties are severe—up to 1 million ringgit and 10 years in prison—but the organizational model keeps actual risk low. The machine operator is rarely the one renting the house or owning the equipment.

There is also an opportunity cost: Malaysia is trying to reduce reliance on coal, expand clean energy, and develop data centers. Every kWh stolen is energy lost from key economic sectors.

Where do they go when the lights go out?

In Malaysia, illegal miners constantly move between abandoned houses, empty commercial spaces, even deserted malls, installing heat shields, CCTV, and anti-raid booby traps.

One viral example was the ElementX Mall near the Malacca Strait, which housed a large number of mining machines only cleared out after a leaked video surfaced on TikTok.

In Sarawak, mining rigs have been found in lumberyards or buildings deep in the forest, connected directly to overhead power lines.

And, as with global trends, when one place tightens controls, the machines move to another with cheaper electricity or looser oversight.

After China’s 2021 ban, a “great migration” of mining rigs moved to Kazakhstan, North America, and other energy-rich regions. When Kazakhstan cracked down, rigs moved on to Russia and Central Asia.

Kuwait is aggressively cracking down on households using 20 times normal electricity. Laos, which previously welcomed miners, now plans to cut power to all crypto operations starting in 2026 to prioritize AI data centers and heavy industry.

Even China—where mining is banned—has seen underground activity return, accounting for 14–20% of global hashrate in 2025.

Malaysia is also caught in this cycle: when one area tightens, miners either hide deeper within the country with better camouflage or move to neighboring nations.

Akmal says the ability to relocate quickly and the operational model show this is the work of organized groups, not individual miners.

The battle is no longer just about electricity theft. It’s a question of whether Malaysia can protect its power grid for green transition and the digital economy, or if it will become just another stop in the global hunt for cheap electricity—each step scanned by drones.

To Tan