Chinese Nationals Detained in Crypto Mining Clampdown in Libya
Authorities in Libya have detained 50 Chinese nationals suspected of involvement in an illicit crypto mining operation in Zliten, a city located 160 kilometers east of the Libyan capital of Tripoli.
The attorney general’s office in Libya made the announcement on Friday, revealing that the individuals were caught operating a cryptocurrency mining farm within an abandoned iron factory.
Mining operation dismantled
Photos and videos released by the office of Attorney General Siddiq Al-Sour showcased the dismantling process of the extensive mining systems discovered in Zliten.
This is not the first instance of Chinese miners being detained for crypto mining activities in the North African country. The development follows the recent arrest of ten other Chinese nationals in the city of Misrata on the Mediterranean coast, as well as at two sites within the capital, Tripoli. The individuals were apprehended on Wednesday while being caught “red-handed” with numerous powerful equipment used for intricate proof of work (PoW) mining calculations. The mining rigs were subsequently confiscated by the attorney general’s office.
Mining ban
Despite the official ban on cryptocurrency mining in the country, Libya has witnessed a high prevalence of such activities, with the nation recording the highest percentage of cryptocurrency mining across the African continent in 2021. It is estimated that Libya accounted for approximately 0.6 percent of global Bitcoin production during that year.
Libya’s appeal as a destination for cryptocurrency mining stems from its low electricity costs, which stand at a remarkably low rate of $0.004 per kilowatt hour. This cost is approximately 40 times cheaper than in the United States, making Libya an attractive location for miners.
While energy may be cheap, the increased demand for electricity that crypto mining brings puts a strain on what was an already vulnerable power grid in the country. That has resulted in frequent and lengthy power blackouts, particularly during the summer months.
A lack of oversight has also encouraged an influx of Chinese miners, albeit with these recent arrests, it appears that the Libyan authorities are stepping up the level of oversight and enforcement. The vast majority of Bitcoin miners were based in China up until a mining ban was enforced in 2021.
Global issue
That event led to an exodus of miners internationally. Some established themselves legally in the United States and elsewhere. The first casualty of illegal mining was Kazakhstan. The sudden arrival of miners led to its power grid coming under pressure. As a consequence, the Central Asian country clamped down on the activity, and later regulated it.
In response to these illegal activities, Libyan authorities have intensified their efforts to combat cryptocurrency mining operations. They are conducting investigations into alleged mining sites in Tripoli and Misrata, aiming to curtail these activities and mitigate the strain on the country’s electricity infrastructure.
The recent arrests highlight the ongoing challenges associated with illegal mining activities in jurisdictions globally where cheap energy can be exploited, giving rise to the need for enhanced regulatory measures to address these issues.
