Libya’s crypto crackdown highlights energy and water crisis

Libya’s government has escalated its pursuit of illegal cryptocurrency miners, targeting an industry that has flourished in a legal vacuum which has turned the country into one of the region’s leading Bitcoin producers, as reported by The New Arab and agencies on December 9.

Libya’s crackdown on crypto miners highlights the countries growing energy and water crisis, due to the demand that cryptocurrencies are placing on already constrained energy and water systems in the country.

In November 2025, prosecutors charged nine people accused of running mining equipment inside a steel factory in the city of Zliten. The group received three-year prison sentences, along with orders to seize their machines and return the profits authorities deemed unlawful.

These events unfolded despite a 2018 Central Bank of Libya ban on cryptocurrency transactions, introduced over concerns about money laundering and terrorism financing.

Even under the ban, Libya has become the leading Bitcoin-mining country in the Arab world and Africa. Countries across the region have taken a firm stance on cryptocurrencies, such as in Algeria where a sweeping ban on all cryptocurrency activities was enacted in July 2025.

Experts attribute the growth of Bitcoin-mining in Libya to low electricity costs, as low as $0.004 per kilowatt-hour, and the ability of operators to conceal equipment in fortified compounds where heat signatures are muted.

Prime Minister Abdul Hamid Dbeibah, the head of the Tripoli-based Government of National Unity (GNU), has warned that illicit cryptocurrency mining drains between 1,000 and 1,500 megawatts per operation, while power-sector officials report consumption as high as 2,000 megawatts per transaction.

Estimates suggest mining uses about 2 per cent of national electricity output, roughly 0.855 terawatt-hours each year. This is particularly concerning for Libya given that the country is currently struggling with widespread power outages.

The energy crisis is of such importance that a committee was formed by Libya’s Director of the Reconstruction and Development Fund, of the eastern government, whose sole purpose is to concentrate on long-term plans as well as actions to address problems with power generation, transmission, and distribution.

It has been reported that the energy crisis in Libya is affecting both food and water security in the country. Alongside the strain on the countries energy systems, crypto mining is also adding to the pressure on water security in Libya due to the huge amounts of water needed for cooling the computer systems that are used. The BBC reported that each Bitcoin transaction uses on average “a back yard swimming pool” of water.

This is of huge concern for the country considering it is currently enduring one of the most extreme periods of drought in its modern history. After the closure of 35 bakeries in the Libyan city of Zliten, due to power shortages, mayor Muftah Hamadi, told local media that a lack of diesel fuel is directly responsible for the frequent power outages.

Crypto mining in Libya, with its high electricity demands, adds a dangerous extra burden on an already fragile energy grid, a system already destabilised by widespread fuel smuggling that drains domestic supply. Recent reporting shows that the smuggling of oil and diesel out of the country has cost Libya around US $20 billion between 2022 and 2024, depriving local markets of fuel needed for generators and public electricity infrastructure.

The New Arab and agencies, BBC, Maghrebi.org