Libyan authorities have successfully dismantled a large-scale crypto mining operation in the western part of the country, leading to the detention of 50 Chinese nationals, according to a statement from the prosecution in Tripoli.
The operation was uncovered during a search conducted by the interior ministry agents on a farm located in Zliten, approximately 160 kilometers (100 miles) east of the capital.
Investigations revealed that minors were being exploited to generate virtual currencies using significant computing power.
The detained Chinese nationals were allegedly involved in providing assistance for the operation.
A video shared on the Facebook page of the Tripoli prosecutor’s office showcased the infrastructure of the farm, with structures lacking windows but housing numerous industrial fans, computers, and hardware.
This is not the first crypto-mining farm to be dismantled in Libya recently. Authorities announced the dismantlement of an illegal crypto-mining farm in Misrata, operated by 10 Chinese nationals.
The nature of crypto mining requires stable power supply, reliable internet connectivity, and costly equipment, which pose challenges in war-torn Libya due to regular power cuts and irregular internet speeds.
Libya’s central bank had previously banned cryptocurrency transactions in 2018, pending the establishment of regulations to govern its use in the country. The ban reflects the divided governance in Libya, with two rival administrations seeking to regulate the cryptocurrency landscape.
“We are investigating two cryptocurrency mines in the jurisdictions of Tripoli and Misrata,” said the Attorney General’s office in a Facebook post.
“10 Chinese nationals have been apprehended, who were found in possession of the computers performing complex calculations.”
The devices and equipment found have been seized pending further investigation and the Chinese nationals held in custody, according to the statement.
Crypto-currency mining is officially banned in Libya but has soared in popularity despite the prohibition, with Libya accounting for around 0.6% of all the world’s Bitcoin according to one study in 2021 – the highest percentage in all of Africa.
Libya’s low electricity costs – $0.004 per kilowatt hour, around 40 times cheaper than the US – make the country ideal for the high energy consumption required to keep crypto mines functioning.
Mining Bitcoin requires huge amounts of computational power, which in turn requires large amounts of electricity.
But as Libya has continued to struggle with rolling power blackouts lasting for up to 18 hours a day during the summer, authorities are trying to clamp down.
Disputed Tripoli-based Libyan prime minister Abdulhamid Dbeibah has even blamed the electricity blackouts on massive energy usage by bitcoin farms across the country.
“Libya is a key global hotspot for digital currency factories,” said Dbeibah in July last year, promising to clamp down on their energy usage.
However, with Libya’s electrical capacity meeting only two-thirds of peak summer demand in recent years, clamping down on crypto-mining enterprises will only partially solve the problem of chronic under-investment in Libya’s power grid.
Cryptocurrencies have risen in popularity in recent years but remain closely associated with illegal transactions, such as drugs, guns, forged documents, and even illegal pornography.
However, greater attention is being paid to the virtual currency by legitimate financial organisations, and some central banks are beginning to explore how they can cash in on Bitcoin’s growing popularity.
