Kuwait Declares Cryptocurrency Mining Illegal, Citing Violations of Multiple Laws and Its Strain on the Country's Electrical Infrastructure

The Ministry of Interior in Kuwait has issued a warning against the practice of cryptocurrency mining, declaring it an unlicensed and illegal activity that violates several existing laws.

Kuwait’s Ministry of Interior has warned against the practice of cryptocurrency mining, declaring it an unlicensed and illegal activity that violates several existing laws and strains the country’s electrical infrastructure.

Several Laws Breached By Crypto Mining

In a statement on Friday, April 22, the Ministry of Interior highlighted several key pieces of legislation that are being breached by those engaging in unauthorized cryptocurrency mining.

At least four laws were cited by the Ministry, beginning with Law No. (31) of 1970 amending the Penal Law, specifically Article 158. This law pertains to swindling through fraudulent schemes and trickery, which the Ministry implied could be applied to cryptocurrency mining.

Additionally, the Ministry mentioned Law No. (37) of 2014 concerning the Communications and Information Technology Regulatory Authority. Article 108 of this law pertains to the prohibition of operating a broadcasting station without a license, which the Ministry may be considering in light of the technical aspects of cryptocurrency mining.

The Industrial Law No. (56) of 1996 was also mentioned, specifically Article 194. This law pertains to engaging in an industrial activity without obtaining a license from the Public Authority for Industry. Finally, the Ministry brought up Law No. (33) of 2016 pertaining to the Kuwait Municipality, specifically Article 174. This law pertains to engaging in an activity or profession without obtaining a license from the Kuwait Municipality.

Energy Consumption A Strain On Electrical Infrastructure

Beyond the legal ramifications, the Ministry highlighted the significant strain that cryptocurrency mining places on the nation’s electrical infrastructure.

Officials stated that the energy-intensive process leads to “excessive consumption of electrical energy, which causes an increase in the load on the public network.” This, the Ministry warned, results in “interruptions in the electrical current affecting residential, commercial, and industrial areas, and disrupts the provision of essential services.”

The Interior Ministry went on to state that such disruption poses a direct “threat to public safety and the regularity of providing basic services.”

The warning was issued following coordinated efforts between several key governmental bodies, including the Ministry of Electricity and Water and Renewable Energy, the Public Authority for Communications and Information Technology, the Public Authority for Industry, and Kuwait Municipality.

Recognizing that some individuals or entities may be unaware of the legal implications, the Interior Ministry has called on entities involved in cryptocurrency mining to “adjust their status quickly.” However, the statement made it clear that this window of opportunity is limited.

“In case of non-compliance, the necessary legal measures will be taken against all violators, including referring the violators to the competent investigation authorities to take the necessary action in accordance with the prevailing laws,” the Ministry said.