Kuwait Launches Crackdown on Crypto Mining Due to Growing Power Crisis: Report

Kuwait has launched a crackdown on cryptocurrency miners, claiming them of worsening the country’s power problem and resulting in blackouts. The government has identified these mining activities as a major contributor to the strain on the power grid which has already led to blackouts in some areas.

According to Kuwait’s Ministry of Interior, authorities began a wide-ranging security operation last week, targeting homes that had been repurposed as crypto mining hubs. While cryptocurrency trading is already banned in the country, mining itself exists in a legal grey area, with no specific regulations in place. Officials now deem it an unlawful use of the country’s heavily subsidized electricity.

Kuwait is facing a growing energy issue caused by rapid population increase, urban expansion, rising temperatures, and ageing power infrastructure. According to Reuters, the country’s low-cost electricity has made it an appealing base for cryptocurrency miners, putting additional strain on the power grid, particularly during the summer months when electricity demand spikes.

While cryptocurrency mining is not the only main cause of Kuwait’s energy shortfall, a source at the Ministry of Electricity confirmed that it contributes significantly to the situation. Alex de Vries, founder of Digiconomist, told Reuters that even small-scale mining operations could further strain Kuwait’s already fragile power supply by putting an excessive amount of weight on the country’s comparatively modest electricity consumption.

Authorities have previously discovered about 100 households engaged in mining operations in one prominent area, Al-Wafrah in southern Kuwait, with some drawing up to 20 times the typical household electricity usage. Following enforcement actions in the area, power consumption reportedly dropped by 55 per cent, according to the Ministry of Electricity, cited by Reuters.

Analysts and former officials, including Saud Al-Zaid, a former executive board member of Kuwait’s Communications and Information Technology Regulatory Authority, have noted that a combination of weak oversight, generous subsidies, and legal ambiguity allowed such operations to flourish. The latest crackdown aligns Kuwait with other nations like Russia and Kosovo, where governments have intervened to curb crypto mining in order to manage domestic energy demands.