Kuwaiti authorities have issued a stern warning concerning illicit crypto mining, emphasizing potential legal repercussions for those involved as the practice surges despite official prohibitions.
The Ministry of Interior clarified on April 22 that cryptocurrency mining activities contravene multiple national laws. These breaches involve regulations against unauthorized operations, rules governing communications and technology infrastructure, industrial practice laws, and municipal codes concerning resource management.
This alert follows a nationwide investigation prompted by unusual electricity consumption patterns. A collaborative effort involving energy officials pinpointed over 1,000 locations, particularly residences in the Al-Wafra area using up to twenty times the standard local power draw, strongly suggesting large-scale mining operations.
This crackdown occurs within the framework of a comprehensive ban on all crypto-related activities, including digital asset trading and transfers, instituted by Kuwait’s Capital Markets Authority back in 2023.
Despite the stringent regulations, mining activities persist, largely attributed to Kuwait’s notably low electricity costs, making it an attractive, albeit illegal, location for energy-intensive blockchain computations. This situation highlights the challenge regulators face globally when cheap power intersects with crypto mining incentives.
The persistence extends beyond mining; residents continue engaging in crypto asset trading. This was starkly illustrated by the recent “Bitcoin Kuwait” scheme collapse, where investors reportedly lost approximately $130 million (40 million dinars) to a fraudulent token, underscoring ongoing risks within the local crypto sphere despite the ban.