Kuwait Cracks Down on Cryptocurrency Mining Amid Power Crisis
Kuwait has launched a significant crackdown on cryptocurrency mining, blaming it as a major contributor to the country’s ongoing power crisis. The Ministry of Interior recently initiated a security operation targeting homes being used for illegal crypto mining activities. Although crypto trading is already banned in Kuwait, the legal framework still lacks clear regulations specifically addressing mining.
The country’s energy crisis has worsened due to rapid population growth, urban development, increasing temperatures, and delayed maintenance of power plants. With electricity prices heavily subsidized and therefore extremely low, some individuals have taken advantage by operating energy-intensive mining rigs. In areas like Al-Wafrah, certain homes were reportedly consuming 20 times more electricity than usual. After enforcement efforts began, power consumption in the area dropped by 55%.
Kuwait’s Capital Markets Authority has also enforced a full ban on digital asset mining, prohibited the recognition of cryptocurrencies as decentralized currency, and barred companies from offering any crypto-related services. These restrictions are part of Kuwait’s compliance with international anti-money laundering standards set by the Financial Action Task Force (FATF).
Despite Kuwait contributing only a small fraction—about 0.05%—to global Bitcoin mining in 2022, its impact on the country's strained power grid is significant. In contrast, regional neighbors like the UAE have embraced crypto industries, with Dubai recently hosting a major event attended by figures such as Eric Trump.
Authorities continue to warn the public about the dangers of dealing in virtual assets, stressing that these assets lack legal recognition, are not backed by any government, and are highly speculative in nature.
---
Sources:
Reuters.com
CoinDesk.com
ArabianBusiness.com
