- Libyan officials detained 50 Chinese nationals involved in an illegal cryptocurrency mining operation in Zliten, west of the country.
- The Central Bank of Libya banned cryptocurrency transactions and mining in 2018 due to lack of regulation and concerns over criminal activity.
- Despite the ban, low electricity costs in Libya have made it an attractive location for crypto mining, hosting 0.6% of global bitcoin mining.
In an unfortunate turn of events, on Thursday, the prosecution in Tripoli announced that 50 individuals from China have been apprehended by Libyan officials following a clampdown on a cryptocurrency mining facility in the country’s western region.
Cryptocurrency mining involves confirming transactions on a blockchain by resolving complex mathematical problems. Miners receive cryptocurrency as a reward for their efforts. This procedure demands substantial energy consumption, necessitating high-powered hardware and considerable electricity.
The authorities disclosed that during a search operation at a farm in Zliten, located approximately 160 kilometers (99 miles) east of the capital. Agents from the Interior Ministry discovered an extensive setup for generating virtual currencies being operated by the detained Chinese nationals.
The Tripoli Attorney General Office’s Facebook page posted photos and a video displaying a gloomy, windowless space inundated with hardware, cables, and servers, while agents conducted their raid. Another image showed the exterior of the elongated building, equipped with numerous fans at the rear to maintain server temperatures.
According to the Italian newspaper Agenzia Nova, the mining setup was situated inside an abandoned iron manufacturing facility. The prosecutors also mentioned that on Wednesday, law enforcement had taken down another unauthorized cryptocurrency mining operation in the harbor city of Misrata, which was managed by an additional 10 Chinese nationals.
In 2018, the Central Bank of Libya prohibited cryptocurrency transactions owing to the absence of government regulation and worries regarding the potential attraction to unlawful activities, including the funding of terrorism. Cryptocurrency mining is similarly illegal in Libya.
Nonetheless, the relatively low electricity costs in Libya have contributed to the appeal of cryptocurrency mining, despite its prohibition. The substantial electricity requirements for mining have been somewhat offset by these lower costs. A study in 2021 revealed that Libya is home to 0.6% of the global bitcoin mining activities.