Authorities in Kuwait have launched a major crackdown on cryptocurrency mining in the Al-Wafrah region, leading to a 55 percent drop in energy consumption almost overnight. The operation targeted homes suspected of housing crypto mining rigs, as the country grapples with soaring temperatures and power grid strain. The surge in energy usage from mining operations had contributed to blackouts, raising concerns over public safety and energy stability. Kuwait’s crackdown on cryptocurrency mining reflects a decisive move to protect its energy infrastructure.
The Kuwait Interior Ministry described crypto mining as an “unlawful exploitation of electrical power.” Officials warned that the high electricity consumption could cause outages in residential, commercial, and service areas, posing risks to public safety. Although crypto trading has long been illegal in Kuwait, no specific regulations have previously addressed crypto mining. Kuwait’s crackdown on cryptocurrency mining signals a shift towards stricter oversight of energy-intensive activities.
The Ministry of Electricity revealed that around 100 homes in the Al-Wafrah region were involved in cryptocurrency mining. Some of these properties reportedly consumed over 20 times the electricity of an average Kuwaiti household. Kuwait’s crackdown on cryptocurrency mining targeted these high-energy consumers, aiming to stabilize the power grid during the peak of the heatwave.
The allure of cheap electricity in Kuwait, made possible by the country’s oil wealth, has long attracted crypto miners. Electricity costs in Kuwait are far lower than in many Western countries, where the high cost of power makes mining unprofitable. For example, the cost of mining one Bitcoin in Iran is $1,324, while in Ireland it soars to $321,000. In the United States, the average cost is approximately $107,000, pushing many miners out of business.
Saud Al-Zaid, a former executive at Kuwait’s Communications and Information Technology Regulatory Authority, commented on the situation. He stated, “They saw government subsidies, saw the absence of oversight, and saw no laws in place, so they exploited the situation to their benefit.” His remarks highlight the regulatory gap that allowed miners to operate without legal consequences until now.
The crackdown also comes amid global changes in Bitcoin mining economics. The value proposition of mining Bitcoin took a major hit last year after Bitcoin’s halving event. This event reduced mining rewards from 6.25 BTC to 3.125 BTC, effectively doubling the cost of mining for operators. Many small and independent miners found the costs unsustainable, leading to market consolidation among large mining pools. The next halving event, scheduled for 2028, will reduce mining rewards even further to 1.5625 BTC.
Kuwait’s crackdown on cryptocurrency mining is part of broader efforts to manage energy consumption during critical times. With temperatures soaring and electricity demand spiking, authorities are stepping up efforts to eliminate illegal activities that drain power resources. For now, Kuwait is reinforcing its commitment to energy stability and public safety, signaling a new era of regulatory enforcement against unlicensed crypto mining.
