KUWAitt, May 1 (Reuters) – Kuwait has started a broad crackdown on illegal bitcoin mining activities in a bold attempt to handle its worsening energy situation. Just as the nation is ready for maximum summer heat, officials have found that crypto miners are a leading cause of national blackouts.
Targeting residential buildings covertly used for mining cryptocurrencies—a practice now declared unlawful under Kuwait’s energy regulations—the Ministry of Interior revealed that a broad-ranging security operation started last week. Kuwait has outlawed trading cryptocurrencies but has not yet set particular legal rules over mining operations.
The ministry claims that illegal mining activities abuse subsidised electricity, usually resulting in power outages across residential, business, and service areas. Officials warn that these disturbances endanger public safety and tax the already strained electrical system.
Cheap Electricity Fuels Crypto Surge
The University of Cambridge estimates Kuwait’s meagre worldwide stake in Mobile Bitcoin Mining —just 0.05% as of 2022—but its low-cost electricity has attracted miners to this refuge. Limited enforcement, regulatory inadequacies, and affordability have caused great system abuse.
“Even a small portion of global mining can have a significant impact on Kuwait’s relatively modest energy infrastructure,” said Alex de Vries-Gao, creator of Digiconomist, a website tracking the environmental impact of cryptocurrencies.”
Authorities concentrated their efforts on Al-Wafrah, Kuwait’s southernmost area, where supposedly more than one hundred houses were turned into mining centres. A few of these homes were said to consume twenty times more than average. The electricity ministry claims regional energy consumption plummeted by 55% following last week’s raids.
Crypto Mining Adds to Kuwait’s Power Woes
Kuwait, an OPEC member, is facing severe energy problems brought on by urban development, a fast population increase, rising temperatures, and delayed power plant maintenance. Officials advise people to reduce the use of cooling systems and save electricity as summer approaches.
“People used the subsidies and lack of control for personal benefit,” said former Kuwaiti Communications and Information Technology Regulatory Authority executive board member Saud Al-Zaid. Although it is not the only reason the energy load exists, crypto mining adds to the growing pressure. Nations like Kosovo and Russia have limited mining by similar measures to preserve their electricity sources.
Kuwait Warns, Dubai Welcomes
Unlike Kuwait, several of its Gulf counterparts are approaching cryptocurrencies more candidly. On the other hand, Dubai recently had a big crypto conference attracting attention from worldwide personalities, including Eric Trump, son of former U.S. President Donald Trump.
While adopting a more austere regulatory strategy, the Central Bank of Kuwait continues to warn people about the hazards of investing in digital currencies.
