According to a Reuters report, the Kuwait government has launched a crackdown on cryptocurrency miners across the country, accusing them of exacerbating a severe shortage over the summer. Last week, the Ministry of Home Affairs declared a “wide-range” security campaign targeting homes converted into mining centres.
Power grid under severe strain
Crypto mining operations “represent illegal exploitation of electricity” and could lead to power outages affecting residential, commercial facilities and critical services, Kuwait authorities said. The project “presents a direct threat to public safety,” the Home Office added in a statement.
The power shortage in the Gulf country is a result of multiple causes, including population growth, urbanization, rising temperatures, and maintenance costs at current power plants. Authorities are focusing on the southern sector of Alwahula, where around 100 homes are said to be used for mining work.
Video: Kuwait Busts Crypto Miners ‘Den’ Denting opersin#Kuwait #cryptominning #cryptocurrency https://t.co/uji7sh6tal
– Arab Times – Kuwait (@arabtimeskuwait) April 25, 2025
Mining work utilizes inexpensive electricity
According to previous reports from the Ministry of Electricity, some of the mining facilities in Alwahula use 20 times the average power level required by a regular home. The country’s highly subsidized and inexpensive electricity has brought miners who want to make great profits.
A rendering of a crypto mining operation. Image: Gemini Imagen.
Legal grey area fuel problem
Kuwait prohibits cryptocurrency trading, but the country does not have laws governing mining operations. This loophole allowed miners to work within legal boundaries, even if central banks warned against investing in cryptocurrency.
This case shows how crypto mining searches for areas with low power costs. The same trend has been observed worldwide, with countries from Kosovo to Russia limiting mining to avoid electricity shortages.
Early results show strong influence
The Ministry of Electric Power has announced a 55% reduction in Alwahula’s energy consumption after crackdowns last week. This sudden decline indicates that the crackdown was successful in the early stages.
Kuwait’s cryptocurrency policy is inconsistent with some of its neighbors. As Kuwait curbs mining, Dubai was held to a major crypto conference this week with the attendance of Eric Trump, the son of US President Donald Trump.
A study from the University of Cambridge estimates that Kuwait was responsible for just 0.05% of the world’s Bitcoin mining in 2022. But even this small percentage can have a major impact on Kuwait’s relatively small electrical grids, experts say.
“To have a significant impact on Kuwait’s relatively small overall electrical use, a small portion of the entire Bitcoin mining network is needed,” said Alex De Vries-Gao, co-founder of DigiConomist, a crypto energy usage tracker.
As Kuwaiti spends the summer in the coming months, authorities continue to ask citizens to reduce their electricity consumption, hoping that miners clampdowns will avoid frequent blackouts over the hot summer months.
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