Kuwait’s Ministry of Interior has issued a firm warning against illegal cryptocurrency mining, following the discovery of over 1,000 unauthorised mining operations across the country. The ministry announced the crackdown on April 22, urging violators to halt their activities immediately or face legal prosecution.

Officials emphasised that crypto mining remains strictly prohibited under Kuwaiti law, citing violations of the Penal Code, communications and technology regulations, the Industry Law, and municipal resource use codes.

High Electricity Usage Uncovers Hidden Mining Operations

Authorities uncovered the illegal mining sites during a nationwide energy audit, which flagged abnormal electricity consumption patterns. A collaborative investigation between the Ministry of Interior and the Ministry of Electricity, Water and Renewable Energy revealed that certain residential properties in the Al-Wafra region were using up to 20 times more electricity than neighbouring homes.

This energy spike led investigators to suspect that crypto mining rigs were operating behind closed doors, likely taking advantage of Kuwait’s low electricity costs.

Crypto Activities Still Persist Despite Nationwide Ban

Kuwait banned all crypto-related activities in 2023, including mining, trading, and token transfers. The Capital Markets Authority implemented the ban as part of a national policy aimed at financial security and regulatory control.

However, mining operations and underground trading continue to exist. Analysts believe that low operational costs and inconsistent enforcement have allowed crypto activity to flourish quietly until now.

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Bitcoin Kuwait Scandal Highlights Risks in Unregulated Markets

The Ministry’s renewed enforcement follows the fallout from the Bitcoin Kuwait scandal, where an unregistered token gained massive attention among local investors before collapsing. The project ultimately failed, resulting in an estimated loss of 40 million Kuwaiti dinars, equivalent to approximately $130 million.

The scandal has become a cautionary tale, underscoring the risks associated with unregulated crypto projects and the importance of clear policy enforcement.

Final Warning and Legal Consequences

The Ministry of Interior stressed that any continued violation of the crypto mining ban would result in strict legal action, including the potential for fines, asset seizures, and criminal prosecution. Officials have urged all residents and businesses to adhere to the regulations and avoid involvement in unauthorised blockchain activities.

As Kuwait tightens its grip on digital asset enforcement, the country signals a zero-tolerance policy on crypto mining and illicit blockchain ventures.

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