Kuwait issues new statement on the illegality of crypto mining

The Kuwait Ministry of Interior (MoI) has issued a statement saying that crypto mining in the country is illegal and unlicensed. Officials from Kuwait’s Ministry of Electricity, Water, and Renewable Energy have noted that there are over 1,000 crypto mining sites in the country.

In a press statement published on X, the General Department of Security Relations and Media at the ministry clarified that cryptocurrency mining violates several key laws, including Law No. (56) of 1996 related to the Industry Law, Law No. (31) of 1970 amending certain provisions of the Penal Code No. (16) of 1960, Law No. (37) of 2014 establishing the Communications and Information Technology Regulatory Authority (CITRA), and Law No. (33) of 2016 concerning the Kuwait Municipality.

The Ministry noted that crypto mining depletes electricity power and increases the load on the power networks which can result in power outages a threat to public safety.

This warning follows joint efforts between the Ministry of Interior, the Ministry of Electricity, Water and Renewable Energy, the Communications and Information Technology Authority, the Public Authority for Industry, and Kuwait Municipality. These efforts are part of a coordinated national initiative to address these illegal practices and reduce their adverse effects on the country’s electrical infrastructure.

The Ministry of Interior urged violators to promptly rectify their activities, emphasizing that failure to comply will result in necessary legal actions. Violators will be referred to the appropriate investigative authorities for further action in accordance with applicable laws.

Crypto trading and payments in Kuwait are also illegal

The Ministry of Finance does not recognize cryptocurrencies for purposes of official commercial transactions. Similarly, the Central Bank of Kuwait (CBK) prohibits the banking sector and companies under its control from trading in cryptocurrencies. The prohibition includes acceptance of cryptocurrency usage in e-payment transactions and mediation between the parties to cryptocurrency transactions.[523] The CBK has asked the Ministry of Commerce and Industry to warn consumers about the risks of cryptocurrencies such as Bitcoin.

Kuwait is one of the most affordable countries for crypto mining

In 2023, estimates dubbed the country the most affordable location to mine bitcoin (BTC) worldwide. One roundup suggested the cost of mining in Kuwait was just $1,400 per BTC in 2022 compared to more than $18,000 in Texas (bitcoin was worth more than $40,000 at the time).

Bitcoin mining consumes about 140,336 GWh annually, which is more than the yearly electricity consumption of countries like Ukraine or Malaysia, according to data collected by Best Brokers.

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