Kuwait has officially outlawed cryptocurrency mining, labeling it “illegal and unlicensed” as the nation grapples with a deepening energy crisis. This marks a significant policy shift aimed at reducing pressure on its overburdened power grid, which has been pushed to the brink by soaring summer temperatures and increasing air conditioning demand. Unlike Dubai, which has positioned itself as a global crypto hub, Kuwait is taking a more conservative stance, reflecting a broader national priority to ensure energy stability over digital asset growth.
Crackdown on Illegal Crypto Mining Amid Soaring Power Use and Grid Instability Risks
The Ministry of Interior has initiated a sweeping crackdown targeting residential homes suspected of housing crypto mining rigs. Officials argue that these operations illegally consume massive amounts of electricity and pose a direct threat to public safety due to their potential to trigger blackouts. The operation has been especially focused on the Al-Wafrah region, where over 100 homes were reportedly used for mining. Following raids, energy use in the area dropped by more than half, confirming the scale of the power being diverted for these activities.
Kuwait Bans Crypto Mining to Protect Power Grid Amid Energy Crisis and Summer Demand SurgeKuwait’s low electricity costs—among the cheapest globally due to heavy government subsidies—have made the country an appealing location for crypto miners aiming to maximize profits. However, this affordability is now a liability, as it encourages excessive and unregulated energy use. Officials warn that, in the context of rising urban development, population growth, and neglected infrastructure, the added burden from crypto mining could destabilize the national grid further, especially during peak summer months.
Legal Clampdown Targets Crypto Mining as Broader Energy Concerns Persist in Kuwait
While crypto trading was already banned in Kuwait since 2023, mining had operated in a legal gray zone until now. With the new declaration deeming it illegal and unlicensed, the government is taking firm action. Authorities have identified over 1,000 sites through patterns of abnormal electricity consumption and have disconnected power from known offenders. More than 60 people are currently under investigation, and power restoration is only allowed after approval from security authorities, highlighting the seriousness of the enforcement measures.
Despite the government’s strong stance, some experts suggest that crypto mining may not be the sole or even primary cause of Kuwait’s energy issues. A source within the Ministry of Electricity admitted that mining is only part of a broader set of challenges. Data from the University of Cambridge shows that Kuwait contributed just 0.05% to global bitcoin mining in 2022. Yet, analysts like Digiconomist’s Alex de Vries-Gao point out that even small-scale mining can have an outsized impact in a country with a relatively limited power infrastructure. The crackdown underscores the tension between energy security and technological innovation in the Gulf region.