Southeast Asia Cracks Down on Illegal Crypto Mining and Scams

Southeast Asia is cracking down on illegal crypto mining and related scams that have proliferated across the region, causing significant economic and environmental concerns. According to Malaysia's national utility firm, Tenaga Nasional, illegal power usage by cryptocurrency miners has led to losses exceeding $1 billion since 2020.

The Energy Ministry stated that over 13,827 establishments have been identified as suspected illegal crypto mining sites. In response, Malaysian authorities have intensified their crackdown, conducting multiple raids in collaboration with energy regulators and anti-graft agencies.

The country's public utility warned that such activities jeopardize economic stability and public safety, as well as threaten the national energy supply system. Following China's ban on crypto mining in 2021, several Southeast Asian countries, including Laos, initially welcomed miners seeking cheaper electricity.

However, as the costs of hosting these operations have become apparent, Laos announced plans to discontinue its crypto mining program by the first quarter of 2026, citing insufficient economic benefits and excessive energy consumption during dry seasons.

Thailand's Central Investigation Bureau has also reported seizing dozens of illegal mining machines, which had reportedly cost the state utility around $327,000 in stolen electricity. Experts suggest that the figure of $1 billion in losses for Malaysia may only reflect detected sites, failing to account for undetected operations and long-term infrastructure damage.

Furthermore, the region is grappling with a surge in cryptocurrency-related scams, with some estimates indicating that the cyber-fraud industry in the Mekong region could generate revenues equivalent to a third to almost half of the combined formal economies of Cambodia, Laos, and Myanmar.

Recently, the U.S. government announced the establishment of a Scam Center Strike Force to combat rising cryptocurrency fraud tied to Southeast Asian criminal organizations, which are estimated to defraud Americans of nearly $10 billion annually.

The U.S. has already seized and forfeited over $400 million in cryptocurrency related to these scams. In October, the U.S. and UK imposed sanctions on the Cambodian conglomerate Prince Group for allegedly operating forced-labor scam compounds and laundering proceeds through cryptocurrencies.

The group's CEO, Chen Zhi, was indicted on charges of wire fraud and money laundering, with the U.S. seizing bitcoin worth approximately $15 billion from him. As Laos and Malaysia pivot towards stricter regulations, the future of cryptocurrency mining in Southeast Asia looks increasingly uncertain, raising questions about the sustainability of using fossil fuels for these energy-intensive operations.