Kuwait shuts down on crypto miners as nations struggles with blackouts

Once one of the cheapest nations to mine Bitcoin in, Kuwait has cracked down on the practice, citing rising electricity demands amid an escalating energy crisis.

Crypto miners are once again facing regulatory pressure due to their energy use. On Thursday, May 1, Kuwait initiated a crackdown on crypto mining sites, accusing them of being a major strain on the nation’s electric grid.

According to the country’s interior ministry, the country started a widespread operation targeting homes that engaged in crypto mining. Local media reported that the sweep resulted in investigations of over 60 individuals suspected of engaging in crypto mining.

Crypto mining operations “constitute an unlawful exploitation of electrical power … and may cause outages affecting residential, commercial and service areas, posing a direct threat to public safety,” the ministry said.

Kuwait struggles with rising energy consumption

The move comes as the nation faces recurring blackouts, caused by rapid population growth and rising temperatures. In May, temperatures range from 32°C (90°F) to 39°C (102°F), placing major strain on the electric grid. Widespread air conditioning use is a significant contributor to overall electricity demand.

At the same time, Kuwait ranks within the top 20 countries in the world with the cheapest electricity. According to one report, electricity in Kuwait costs just 2.9 cents per kilowatt-hour, much lower than in most industrialized countries.

Because electricity is one of the most important inputs in proof of work mining, miners in places like Kuwait are more competitive than in many other countries. This has made it an attractive nation for crypto miners, coming out as one of the cheapest places to mine crypto.

While crypto mining was not the only factor contributing to high energy use, Kuwait was not the only country that banned the practice. Earlier, Russia and China, both countries that boast cheap energy, banned the practice. Russia cited strains on the electric grid, while China banned mining due to its commitment to a green energy transition.