Kuwait has launched a nationwide crackdown on crypto mining operations, blaming the energy-intensive practice for worsening the country’s escalating power crisis.

On May 1, the Ministry of Interior initiated targeted raids across the country, shutting down unauthorised crypto mining sites. Officials accused the miners of placing unsustainable pressure on Kuwait’s electricity grid at a time when the country faces recurring blackouts.

According to local media reports, authorities have already investigated more than 60 individuals suspected of mining digital currencies, including Bitcoin. The ministry warned that such activities “constitute an unlawful exploitation of electrical power” and pose a “direct threat to public safety” by increasing the risk of blackouts in residential and commercial areas.

Cheap Electricity Attracts Crypto Miners

Kuwait has long been considered one of the most cost-effective countries for Bitcoin mining, thanks to its extremely low electricity rates. At just 2.9 cents per kilowatt-hour, the country ranks among the top 20 nations with the cheapest power—an ideal environment for energy-hungry crypto miners operating proof-of-work systems.

However, this affordability has become a double-edged sword. With mining rigs consuming vast amounts of electricity, the government now views the sector as a threat to national infrastructure, especially during peak energy months.

Rising Temperatures and Surging Demand

The crackdown comes as Kuwait struggles with rising temperatures and rapid population growth, which have led to increased electricity demand. During May, temperatures often soar above 39°c (102°f), prompting widespread use of air conditioning.

This surge in energy consumption has led to frequent power outages, particularly during the summer months. While crypto mining isn’t the sole cause, it has added a measurable strain to the grid, prompting authorities to take swift action.

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Kuwait Follows Global Trend in Mining Restrictions

Kuwait isn’t alone in cracking down on crypto mining. Other countries with historically cheap energy—like Russia and China—have also banned the practice.

• Russia restricted mining activities in several regions, citing stress on the electrical infrastructure.
  
• China, once the global leader in Bitcoin mining, issued a blanket ban in 2021, aligning with its national carbon neutrality goals.
  

Kuwait’s move contributes to a growing global trend in which governments are reassessing the environmental and infrastructural impacts of mining operations. What was once a profitable haven for miners may soon become one of the most heavily regulated markets in the Middle East.

Will the Ban Impact Global Mining Dynamics?

While the Kuwait crackdown may not significantly alter the global mining hash rate, it signals a tightening grip on energy regulation in the Gulf region. Analysts predict that miners will likely relocate to other crypto-friendly countries with affordable and sustainable energy sources, such as Paraguay, parts of the United States, or Kazakhstan.

Still, Kuwait’s action underscores a critical shift: cheap electricity no longer guarantees a long-term haven for crypto miners.

Final Thoughts

Kuwait’s decision to shut down unauthorised crypto mining sites highlights the complex balancing act between innovation and infrastructure. As global temperatures and energy demands rise, more countries may follow Kuwait’s lead, curbing mining to prioritise public safety and energy stability.

Whether this marks a broader pivot in Middle Eastern crypto policy remains to be seen, but one thing is clear: Kuwait no longer sees crypto mining as worth the cost to its fragile electric grid.

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