Kuwait has initiated a crackdown on cryptocurrency miners, accusing them of contributing significantly to the country’s ongoing power crisis, which has led to blackouts. The operation, which began last week, targets homes used for crypto mining, an activity that authorities have deemed illegal.
According to Kuwait’s Interior Ministry, cryptocurrency mining unlawfully exploits electrical power, placing undue pressure on the grid and threatening public safety by causing outages that affect residential, commercial, and service areas. Although Kuwait has banned cryptocurrency trading, there are no specific laws regulating mining activities.
The country is struggling with an energy crisis driven by factors such as population growth, urbanization, rising temperatures, and delayed maintenance at power plants. Kuwait’s electricity is inexpensive, and the government has urged residents to conserve energy, especially with summer heat looming. However, cryptocurrency mining, which requires massive amounts of energy, is a significant contributor to the power strain, though not the only cause.
Mining operations often set up in regions with cheap power, and cooler climates where it’s easier to cool servers. Researchers from the University of Cambridge noted that Kuwait was responsible for 0.05% of the world’s bitcoin mining in 2022. While there is limited data on energy consumption from crypto miners in Kuwait, even a small share of global mining can have a disproportionate impact on the country’s limited electricity supply.
The crackdown in Al-Wafrah, Kuwait’s southernmost region, where up to 100 homes were reportedly involved in mining, has already yielded results. Energy consumption in the area dropped by 55% following the operation, according to the Ministry of Electricity. Some of these homes were using up to 20 times the normal electricity usage.
Kuwait’s central bank has also warned against investing in cryptocurrency, and the country’s approach stands in contrast to neighboring regions like Dubai, where crypto events and investments are embraced.
