The Middle Eastern country of Kuwait has declared cryptocurrency mining as an “illegal and unlicensed” activity. The decision is part of a broader crackdown, as it tackles a growing energy crisis.
Kuwait’s action are in stark contrast to its neighbour, which has embraced both cryptocurrencies and the accompanying act of mining. The ban is also the latest act on cryptocurrency; prior to this, it only banned any trading but not mining.
Adding to this, the country’s Ministry of Interior has also been conducting raids on homes suspected of housing mining rigs. “These mining operations represent an unlawful misuse of electrical power … and may lead to outages impacting residential, commercial, and service areas, posing a direct risk to public safety.” Following raids in its Al-Wafrah region of Southern Kuwait, the ministry said electricity consumption in the area plummeted by 55%.
One reason cryptocurrency mining has boomed in Kuwait is because, like its neighbour, Iran, electricity is one of the cheapest in the world, with the country heavily subsidising the utility. But, as evidenced by the crackdown and ban, the activity can still put a strain on the national grid. However, it should be clear that the activity isn’t the primary cause of its energy crisis. In the grand scheme of things, it’s still just a fraction of everything else that draws power from the country’s grid.
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