Kuwait has declared cryptocurrency mining “illegal and unlicensed” as part of a sweeping effort to combat a deepening energy crisis, including raids on homes of people suspected of illegally mining cryptocurrencies.
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In Kuwait, mining has been blamed for a deepening energy crisis that has led to rolling blackouts across the country as temperatures rise and air conditioning use soars. Last week, Kuwait’s Interior Ministry announced a “large-scale” operation to identify sites that may be hosting mining equipment.
«Mining is an illegal misuse of electricity… and can result in power outages affecting residential, commercial and service areas, posing a direct threat to public safety,” the ministry said.
The raids focused on the Al-Wafra region in southern Kuwait, where Kuwait’s Ministry of Electricity, Water and Renewable Energy said it found about 100 homes used for mining. Some of them were using 20 times more electricity than a typical household. After the raids, Al-Wafra saw its energy consumption drop by 55%, the government said. Authorities have identified more than 1,000 suspected mining sites across the country, using increased electricity consumption as a key indicator. More than 60 people are currently under investigation, and the Ministry of Electricity has begun cutting off power to sites found to be violating mining laws. Power can only be restored after permission is received from the Ministry of Interior.
Kuwait’s electricity is among the cheapest in the world, thanks to heavily subsidized electricity supplies, making the country an attractive destination for cryptocurrency miners. Kuwait’s power grid is under significant strain due to a number of factors, including rapid population growth, urban expansion, rising temperatures due to the onset of summer heat waves, and problems with power plant maintenance.
Although cryptocurrency trading has been banned in Kuwait since 2023, mining has remained in a grey area, unrestricted by any legal framework.