Kuwait warns against illegal crypto mining after over 1,000 sites exposed in nationwide probe

The Kuwaiti Ministry of Interior has issued a warning about illegal crypto mining in the country, calling on violators to cease their illegal activities or face legal consequences.

The announcement, which was issued on April 22, stated that cryptocurrency mining in Kuwait is illegal as it violates several national laws. These include the Penal Code, which addresses unauthorized or harmful activities, as well as the law governing the country’s communications and technology sector. It also breaches the Industry Law, which controls industrial and manufacturing practices, as well as municipal regulations that oversee proper use of resources and infrastructure.

The Ministry’s warning comes after abnormal electricity usage data has revealed that over 1,000 sites may be running crypto mining rigs. Specifically, the joint effort from the Ministry of Electricity, Water and Renewable Energy has identified homes in the Al-Wafra region to be be consuming unusually high amounts of electricity — up to 20 times the typical usage in the neighborhood.

Kuwait’s mining ban was part of the blanket ban on all crypto-related activities — including mining, trading, and transfers — and was implemented by the Capital Markets Authority in 2023. However, mining activity persists despite the ban, likely due to Kuwait’s exceptionally low electricity costs.

Some residents are also still participating in crypto trading, as evidenced by the recent Bitcoin Kuwait scandal. Despite the official ban, the token managed to gain widespread traction among retail investors before collapsing shortly after launch and vanishing with an estimated 40 million Kuwaiti dinars ($130 million) in investor funds.