Kuwait declares cryptocurrency mining illegal amid power crisis crackdown

[Skye Jacobs]

What just happened? Kuwait has declared cryptocurrency mining "illegal and unlicensed" as part of a broad crackdown to ease pressure on its strained power grid amid a worsening energy crisis. This firm stance contrasts sharply with neighboring Dubai, which continues to embrace the crypto sector, recently hosting a major international conference attended by prominent industry figures.

Kuwait has launched a sweeping crackdown on cryptocurrency mining, blaming the activity for worsening a power crisis that has led to rolling blackouts across the country as temperatures soar and air conditioning demand surges. The Ministry of Interior announced last week that it had begun a "wide-ranging" security operation targeting homes suspected of hosting crypto mining rigs, which officials described as illegal.

"These mining operations represent an unlawful misuse of electrical power … and may lead to outages impacting residential, commercial, and service areas, posing a direct risk to public safety," the ministry said.

The government's campaign has focused on the Al-Wafrah region in southern Kuwait. The Ministry of Electricity reported that around 100 homes were being used for mining, with some consuming up to 20 times the electricity of a typical household. Following the raids, energy consumption in Al-Wafrah dropped by 55 percent, according to a government statement.

Electricity in Kuwait is heavily subsidized and among the cheapest in the world, making the country an attractive destination for crypto miners seeking to maximize profits.

Kuwait's power grid is under strain from multiple sources, including rapid population growth, urban expansion, rising temperatures, and deferred maintenance at power plants. Electricity is heavily subsidized and among the cheapest in the world, making the country an attractive destination for crypto miners seeking to maximize profits.

However, officials warn that the unchecked power consumption from mining rigs is pushing the grid beyond capacity, exacerbating the risk of blackouts as summer heat intensifies.

While cryptocurrency trading has been banned in Kuwait since 2023, mining has existed in a legal gray area, with no specific legislation until recent government action.

The Ministry of Interior has now declared crypto mining "illegal and unlicensed," and warned that violators will face legal penalties. Authorities have identified over 1,000 suspected mining sites using abnormal electricity usage as a key indicator.

The crackdown is being coordinated at the highest levels, with Prime Minister Sheikh Fahad Al-Yousef and Minister of Electricity Dr. Subaih Al-Mukhaizeem overseeing operations. More than 60 individuals are currently under investigation, and the Ministry of Electricity has begun disconnecting power from properties linked to mining activities. Reconnection is only permitted after clearance from the Ministry of Interior.

Despite the government's assertion that mining is a "major" factor in the power crisis, a source at the electricity ministry told Reuters it is not the only cause. Researchers at the University of Cambridge estimated that Kuwait accounted for just 0.05 percent of global bitcoin mining in 2022. Still, Alex de Vries-Gao, founder of Digiconomist, told Reuters, "It only takes a very small share of the total bitcoin mining network to have significant impact on the relatively small total electricity consumption of Kuwait."

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Kuwait declares cryptocurrency mining illegal amid power crisis crackdown

 

[The Talking Tech]

Expected another massive crypto dump....I don't understand why people even bother with such unstable Trump like-minded type of currency.

 

[NumberNine]

Cryptocurrency mining is fundamentally harmful to the survival of the human race.

The rest is greed.

 

[Squid Surprise]

Expected another massive crypto dump....I don't understand why people even bother with such such unstable Trump like-mind type of currency.

While I appreciate you trying to link this to Trump in some way, it really has nothing to do with him or any such "Trump mindset"...

Despite pretending to be a bit democratic, Kuwait is a dictatorship attempting to become more "modern"... the flaw that pretty much all dictatorships face when doing this is that once their citizens realize what they're missing, they aren't very appreciative of their rulers, and try to boot them out...

Most of the Arab dictatorships in the area have realized this and attempt to find a scapegoat for their citizens to blame instead of the leaders themselves... kudos to Kuwait for blaming crypto instead of Israel - but it's still a blatant lie...

 

[Theinsanegamer]

Expected another massive crypto dump....I don't understand why people even bother with such such unstable Trump like-mind type of currency.

In case you havent noticed, the confidence in FIAT currencies has been shaken by decades of over printing, and the traditional banking system has shown its willingness to become political. Crypto bypasses that.

 

[Jim Lahey]

Wonder if they’re embracing the other power hog, AI?

It’s interesting that anyone should be able to be told how they can use a computing resource. Whether it’s validating transactions on a blockchain or generating cat images.

 

[Burty117]

Wonder if they’re embracing the other power hog, AI?

It’s interesting that anyone should be able to be told how they can use a computing resource. Whether it’s validating transactions on a blockchain or generating cat images.

It’s just a scapegoat, if Ai generation was bigger than crypto mining in the country, it would have been used instead.

 

[Theinsanegamer]

Wonder if they’re embracing the other power hog, AI?

It’s interesting that anyone should be able to be told how they can use a computing resource. Whether it’s validating transactions on a blockchain or generating cat images.

You can use your computing resources however you want.

If you want to pull an industrial amount of power to do so, you'll need to either generate it yourself or comply with industrial and commercial licensing for whichever country you are operating in.

These mining operations are ever expanding and consume massive amounts of resources to the point of causing blackouts that affect people other than the crypto miners. Once that occurs the government has a right to step in and ensure, you know, their grid doesnt keep going down. Crypto bros are not well known for following regulations, often they get their power through less than reputable means, so locking them out is seen as the only viable option to stop them.

 

[Jim Lahey]

You can use your computing resources however you want.

If you want to pull an industrial amount of power to do so, you'll need to either generate it yourself or comply with industrial and commercial licensing for whichever country you are operating in.

These mining operations are ever expanding and consume massive amounts of resources to the point of causing blackouts that affect people other than the crypto miners. Once that occurs the government has a right to step in and ensure, you know, their grid doesnt keep going down. Crypto bros are not well known for following regulations, often they get their power through less than reputable means, so locking them out is seen as the only viable option to stop them.

I mean, sure, if a zoning law or something is being broken then that warrants investigation. I have no side here, but I would also say that AI/datacenters aren’t known for following said rules (see the generators being used for X’s operation).

My only point here is that computing resources are computing resources.

Companies like NVidia were hot to deliver boatloads of GPUs to the crypto scene until AI supplanted the market, then they turned heel.

 

[VaRmeNsI]

So playing Wukong on a 5090 is a bad idea atm?

 

[Theinsanegamer]

I mean, sure, if a zoning law or something is being broken then that warrants investigation. I have no side here, but I would also say that AI/datacenters aren’t known for following said rules (see the generators being used for X’s operation).

My only point here is that computing resources are computing resources.

Companies like NVidia were hot to deliver boatloads of GPUs to the crypto scene until AI supplanted the market, then they turned heel.

Well yes, computing resources are computing resources. Your implication

"It’s interesting that anyone should be able to be told how they can use a computing resource"

is that it is a bad thing that you can be told how you may use your computing resources, as if those are any different from any other resource you have access to. My car is a car, that doesnt mean I can drive it however I want. My rifle is my rifle, that doesnt mean I can use it however I want. I could go on.

The trading of crypto has been illegal in Kuwait for 2 years, mining was, somehow, considered a "grey area" when its sole method of profitability relies on crypto trading as a reward for said mining. Not to mention the whole "pulling 55% of the regions electricity and causing blackouts" thing. I think that is deserving of investigation. Had these miners invested in solar power, which would be notable in a country that is 99% DESERT, then you'd have a point, but as it stands the miners were conducting operations using heavily subsidized government resources to conduct operations where the only possible payout is in an illegal transaction.

 

[Hexic]

While I appreciate you trying to link this to Trump in some way, it really has nothing to do with him or any such "Trump mindset"...

He's gonna be beside himself in 3.5 years when Trump is out of office and he's in a content drought of blaming Trump for the sky being blue.

 

[hahahanoobs]

Wonder if they’re embracing the other power hog, AI?

It’s interesting that anyone should be able to be told how they can use a computing resource. Whether it’s validating transactions on a blockchain or generating cat images.

This is Kuwait we're talking about, not Las Vegas.

Very first paragraph:
Kuwait has declared cryptocurrency mining "illegal and unlicensed" as part of a broad crackdown to ease pressure on its strained power grid amid a worsening energy crisis.

With a strained power grid, I'd choose AI over individuals in homes mining on makeshift mining rigs any day of the week.

 

[Squid Surprise]

This is Kuwait we're talking about, not Las Vegas.

Very first paragraph:
Kuwait has declared cryptocurrency mining "illegal and unlicensed" as part of a broad crackdown to ease pressure on its strained power grid amid a worsening energy crisis.

With a strained power grid, I'd choose AI over individuals in homes mining on makeshift mining rigs any day of the week.

Except Kuwait is one of the wealthiest countries in the world and has a crap-ton of oil... so why isn't their grid able to handle this?

Could their leaders be siphoning off this wealth instead of investing it in infrastructure? Nah....

 

[pnntmp]

They don't have "power crisis" or "energy crisis", just a badly designed grid of obviously insufficient capacity.

 

[gamerk2]

In case you havent noticed, the confidence in FIAT currencies has been shaken by decades of over printing, and the traditional banking system has shown its willingness to become political. Crypto bypasses that.

So...your solution is another fiat currency that doesn't have any physical form?

Nevermind that by putting "more" money into the system you are doing exactly what you are complaining about?

 

[Theinsanegamer]

Except Kuwait is one of the wealthiest countries in the world and has a crap-ton of oil... so why isn't their grid able to handle this?

Could their leaders be siphoning off this wealth instead of investing it in infrastructure? Nah....

Perhaps it is. Doesnt change the fact that crypto is taking up a majority of the country's power for illegal operations.

"A red herring is something that misleads or distracts from a relevant or important question."

So...your solution is another fiat currency that doesn't have any physical form?

Nevermind that by putting "more" money into the system you are doing exactly what you are complaining about?

My solution? No. But it is another solution others have come up with. You should do some reading into the arguments for crypto. One of the arguments is that crypto is immune tot he hyperinflationary effects of traditional FIAT, because there are only so many bitcoins that can exist. Sure, an infinite number of hanger-ons can be make on chains like etherium or solana, but for bitcoin, only so many coins can exist, and mining them gets progressively harder. This is why miners go to countries like kuwait where electricity is subsidized to make it possible to continue operations.

The currency is inherently deflationary.

There's also the whole "not being controlled by government" thing. There's a growing number of people with no trust in governing bodies, and actions like banning politicians or websites that say naughty things from receiving paychecks or opening checking accounts is a prime example of how that power is being abused. As the banking system becomes more politicized, expect more people to look for alternatives.

 

[daffy duck]

Maybe they should also crack down on breeding like rabbits.

 

[BuckarooBonzaii]

Their Country their laws. Reminds me of the days when people grew pot in their house and got busted because of high electricity use. I believe metal halide lighting was king in those days.

 

[Squid Surprise]

Perhaps it is. Doesnt change the fact that crypto is taking up a majority of the country's power for illegal operations.

"A red herring is something that misleads or distracts from a relevant or important question."

lol... it's not taking the majority of their power - they allegedly decreased ONE CITY'S power output by 55% after busting a major crypto operation.

And providing a rationale as to WHY they need to do this is NOT a red herring. This is a forum for posting opinions is it not?

Kuwait is a small WEALTHY country with tons of oil reserves - it's why their electricity costs are so low to begin with. They have no excuse for not investing more in their power grid.

 

[Karlos95]

In case you havent noticed, the confidence in FIAT currencies has been shaken by decades of over printing, and the traditional banking system has shown its willingness to become political. Crypto bypasses that.

The blind don't know they are blind, remember

 

[ZedRM]

Good for Kuwait! Now let's do this worldwide!

 

[Freddie159]

Cryptocurrency mining is fundamentally harmful to the survival of the human race.

The rest is greed.

Nope not true, look at Boinc crunching it combines helping Scientists and Researchers with crypto mining as a tangible reward.

 

[hahahanoobs]

Nope not true, look at Boinc crunching it combines helping Scientists and Researchers with crypto mining as a tangible reward.

ChatGPT:
BOINC (Berkeley Open Infrastructure for Network Computing) is an open-source platform that allows volunteers to donate their computer's unused processing power to support scientific research projects — such as:

• Astrophysics (e.g., Einstein@Home)
• Medical research (e.g., World Community Grid)
• Climate modeling
• Mathematics and biology

These projects do not involve cryptocurrency mining.