Kuwait cracks down on cryptocurrency mining amid power crisis

By Ahmed Hagagy

KUWAIT (Reuters) -Kuwait has launched a crackdown connected cryptocurrency miners it accuses of being a "major" origin of a powerfulness situation that has led to blackouts, arsenic authorities question to easiness unit connected the grid earlier the commencement of a sweltering summer.

Authorities started a "wide-ranging" information cognition past week, the interior ministry said successful a statement, targeting homes utilized for cryptocurrency mining, an enactment it said was illegal.

Crypto mining activities "constitute an unlawful exploitation of electrical powerfulness … and whitethorn origin outages affecting residential, commercialized and work areas, posing a nonstop menace to nationalist safety", the ministry said.

Kuwait has banned cryptocurrency trading but has nary laws specifically addressing mining.

OPEC subordinate Kuwait is grappling with a terrible powerfulness situation driven by colonisation growth, municipality expansion, rising temperatures and delayed attraction astatine immoderate plants.

Electricity successful the state is highly inexpensive and the authorities has urged residents not to discarded it arsenic the request to support chill amid sweltering summertime temperatures heaps unit connected a strained electrical grid.

Cryptocurrency mining, though a large origin of the powerfulness crisis, is not the lone factor, a root astatine the energy ministry told Reuters.

Mining for crypto uses immense amounts of computing powerfulness and has prompted authorities from Kosovo to Russia to curb its usage to forestall energy shortages. The miners thin to basal themselves wherever powerfulness is cheap, and often successful colder climes wherever it is easier to chill their servers.

Researchers astatine the University of Cambridge estimated that successful 2022, Kuwait was liable for conscionable 0.05% of the world's bitcoin mining astatine the time.

While determination is nary bully information connected however overmuch powerfulness crypto miners usage successful Kuwait, "it lone takes a precise tiny stock of the full bitcoin mining web to person important interaction connected the comparatively tiny full energy depletion of Kuwait," said Alex de Vries-Gao, laminitis of Digiconomist, a probe task tracking crypto's vigor use.

Kuwait's crackdown has targeted homes successful Al-Wafrah, Kuwait's southernmost area, wherever the energy ministry has antecedently said astir 100 homes were utilized for mining, immoderate of them consuming up to 20 times mean energy levels. Energy depletion successful Al-Wafrah fell by 55% pursuing past week's operation, the energy ministry said successful a connection connected Saturday.

"They saw authorities subsidies, saw the lack of oversight, and saw nary laws successful place, truthful they exploited the concern to their benefit," said Saud Al-Zaid, who formerly served arsenic enforcement committee subordinate of the Communications and Information Technology Regulatory Authority successful Kuwait.

Kuwait's cardinal slope has warned against investing successful crypto. The country's attack to the assemblage differs to that of immoderate of its neighbours which person embraced the industry.

Dubai this week is playing big to a ample crypto event, with Eric Trump, U.S. President Donald Trump's son, among those successful attendance.

(Reporting by Ahmed Hagagy; Additional reporting by Elizabeth Howcroft; Writing by Yousef Saba; Editing by Tommy Reggiori Wilkes and Freya Whitworth)