Libyan authorities are intensifying their crackdown on illegal Bitcoin mining. This comes despite the sector’s significant growth in the country in recent years.
According to a recent report, Libya accounted for about 0.6% of the global Bitcoin hash rate in 2021. This surpassed several European countries. It established Libya as a regional leader in the field. This later prompted authorities to intensify security campaigns against illegal mining.
The report explained the sector remains legally ambiguous. Mining operations continue despite a 2018 Central Bank decision. The decision banned digital currency transactions due to money laundering and terrorism financing concerns. Seven years later, no comprehensive legislation has been issued to regulate the activity. This has created legal confusion for operators, prosecutors, and citizens.
The report attributes Libya’s emergence as a top Arab and African country for Bitcoin mining to low electricity costs. Experts believe the price of $0.004 per kilowatt-hour makes the country one of the cheapest places globally for digital currencies to thrive.
The report quoted legal expert Nadia Mohammed. She said most mining occurs in fortified compounds that hide their thermal signatures behind concrete. Operators are betting that low electricity costs and institutional chaos give them an advantage over authorities in a legal gray area.
Mohammed added that Libyan laws do not explicitly criminalize mining. She explained that anti-terrorism and cybercrime laws indirectly address some related aspects. The cryptocurrency industry itself is not a criminal act. However, associated crimes expose miners to prosecution. She noted these crimes include illegal electricity consumption and importing banned equipment. They also include using proceeds for illicit purposes like money laundering. She called on the Central Bank to issue permits and regulate the activity instead of leaving a legislative vacuum.
Mohammed stated that courts have issued prison sentences against those involved. But new operations appear faster than authorities can dismantle them. The report also quoted economic researcher Ayoub Al-Aujali. He said the legal ambiguity reflects a deeper failure in the governance system.
Al-Aujali explained that mining currently operates completely outside the state framework. He questioned whether the activity falls within or outside the state’s jurisdiction. He believes its informal status affects both energy policy and national security.
Al-Aujali stressed the state must regulate the sector and issue clear, direct legislation. He considers that mining could become a source of national income. It is a modern technology capable of supporting the economy and creating youth employment.
According to the report, officials described the activity as inherently dangerous in the Libyan context. This is due to the lack of a clear legal framework. It is also linked to suspicions of money laundering and terrorism financing. They noted about 54,000 Libyans, or 1.3% of the population, owned cryptocurrencies as of 2022. Officials stated this number increased by 88% by early 2024. The growth was driven by the spread of the internet.
The mining sector consumes an estimated 2% of Libya’s annual electricity production. This energy is diverted from allocations for hospitals, schools, and daily citizen use.
The report quoted Mohammed Al-Fawzi from the General Electricity Company. He said mining operations consume over 2,000 megawatts per operation. This is a huge drain on an infrastructure already suffering from illegal connections, theft, and chronic neglect. Al-Fawzi added that theft of power lines and towers by individuals and organized gangs has worsened the grid’s weakness. He believes the spread of digital currency mining is a direct result of low energy prices and the deteriorating security situation.