Kuwait cracks down on Illegal crypto mining

A severe warning against illegal cryptocurrency mining has been issued by Kuwait’s Ministry of Interior, cautioning violators to cease operations or face legal penalties, local media reported.

According to the announcement that was made on April 22, crypto mining under Kuwaiti Law is strictly prohibited, violating numerous regulations, which include the Penal Code, Industry Law, and municipal regulations.

The warning follows a nationwide investigation that exposed over 1,000 sites under suspicion of running crypto mining arrays.

In a combined effort, the Ministry of Electricity, Water, and Renewable Energy indicated that several homes in Al-Wafra are consuming unusually high amounts of electricity, up to 20 times the typical electricity usage, raising concerns about strain on the national power grid.

Capital Markets Authority implemented Kuwait’s blanket prohibition on cryptocurrency actions, including mining, trading, and transfers, in 2023. Despite this prohibition, mining continues, likely due to Kuwait’s low electricity costs.

Authorities have highlighted that under existing laws, violators found in illegal cryptocurrency mining will be prosecuted.

However, illegal cryptocurrency mining and crypto trading are still active despite the ban, and some residents are also still participating in crypto trading, as seen in the Bitcoin Kuwait scandal, where the token gained traction among retail investors before collapsing, resulting in $130 million in investor losses.

Earlier, Pakistan planned to allocate part of its surplus electricity to Bitcoin mining and AI data centres, the head of Pakistan’s Crypto Council and adviser to the finance minister said on Wednesday, adding it had held talks with several mining firms.

Pakistan’s energy sector grappled with challenges, including high electricity tariffs and surplus generation capacity. The rapid expansion of solar energy further complicated the landscape, as more consumers turned to alternative energy sources to mitigate high costs.

Bilal Bin Saqib, chief executive officer of the council, told Reuters the location of the mining centre was finalised based on the availability of excess power in specific regions.