Key Insights
Libya’s low-cost, subsidized electricity has made it feasible to operate even older and less efficient Bitcoin miners.
At its peak, Libya is estimated to have contributed approximately 0.6% to the global Bitcoin hash rate.
Mining exists in a legal grey area, with hardware imports prohibited but no definitive laws outlining the legality of mining itself.
Authorities now associate illegal mining operations with power shortages and are intensifying raids and legal actions.
In November 2025, Libyan prosecutors discreetly sentenced nine individuals to three years in prison for operating Bitcoin miners within a steel factory located in the coastal city of Zliten.
The court mandated the confiscation of their machines and the return of illicitly generated profits to the state, marking the latest in a series of high-profile raids extending from Benghazi to Misrata, which even detained dozens of Chinese nationals running large-scale operations.
These crackdowns target an industry that, until recently, was largely unknown to outsiders. In 2021, Libya, a nation more recognized for oil exports and frequent blackouts, was responsible for about 0.6% of the global Bitcoin hash rate, surpassing all other Arab and African countries, along with several European economies, according to the Cambridge Centre for Alternative Finance.
This unexpected boom was fueled by inexpensive, highly subsidized electricity and a prolonged period of legal and institutional ambiguity that allowed miners to expand faster than regulators could respond.
In the following sections, we will explore how Libya emerged as a covert mining hub, why its electrical grid is currently under immense pressure, and the implications of the government’s increased crackdown on Bitcoin (BTC) miners in unstable regions.
Interesting Fact: Since 2011, Libya has experienced more than a dozen competing governments, militias, or centers of political power, leading to extended periods where no single authority could implement national energy or economic policies.
The Economics of “Near-Free” Electricity
Libya’s mining boom begins with a figure that seems nearly unbelievable. Some estimates indicate that the country’s electricity price is roughly $0.004 per kilowatt-hour, among the lowest globally. This rate is achievable only because the state heavily subsidizes fuel, keeping tariffs artificially low, even as the grid suffers from damage, theft, and lack of investment.
From an economic standpoint, such pricing creates a significant arbitrage opportunity for miners. They are essentially purchasing energy far below its actual market value and converting it into Bitcoin.
For miners, this transforms the hardware dynamics entirely. In high-cost regions, only the latest, most efficient ASICs can operate profitably. In Libya, even older machines that would be deemed obsolete in Europe or North America can still yield a profit, provided they are supplied with subsidized energy.
This naturally makes the country appealing for foreign operators inclined to import used equipment and accept legal and political risk.
Regional analyses suggest that, at its peak in around 2021, Bitcoin mining in Libya may have consumed approximately 2% of the country’s total electricity output, equating to about 0.855 terawatt-hours (TWh) annually.
In a wealthy, stable grid, such usage might be manageable. In Libya, where rolling blackouts are already commonplace, diverting that much subsidized energy to privately operated server farms poses a significant challenge.
Globally, the mining landscape is predominantly led by the U.S., China, and Kazakhstan, but Libya’s contribution stands out due to its small population, strained infrastructure, and low electricity costs.
Fascinating Fact: Libya loses up to 40% of its produced electricity before it ever reaches households due to grid damage, theft, and technical losses, according to the General Electricity Company of Libya (GECOL).
Inside Libya’s Underground Mining Surge
On the ground, Libya’s mining activities appear drastically different from a polished data center in Texas or Kazakhstan. Reports from Tripoli and Benghazi reveal rows of imported ASICs squeezed into derelict steel and iron factories, warehouses, and fortified compounds, often located on city outskirts or in industrial areas where extensive energy use does not immediately raise concerns.
Interesting Fact: To evade detection, some operators in Libya reportedly cover parts of their setups with cement to obscure heat signatures, making it challenging for authorities to identify them using thermal imaging.
The timeline of enforcement highlights the rapid expansion of this underground economy. In 2018, the Central Bank of Libya declared virtual currencies illegal for trading or use, citing concerns over money laundering and financing of terrorism.
Yet, by 2021, analysts estimated Libya accounted for approximately 0.6% of the global Bitcoin hash rate, marking the highest share in the Arab world and Africa.
Since then, raids have elucidated the depth of these activities. In April 2024, security forces in Benghazi seized over 1,000 devices from a single operation believed to be generating around $45,000 a month.
A year prior, authorities detained 50 Chinese nationals and reportedly confiscated about 100,000 devices in one of Africa’s largest cryptocurrency busts.
In late 2025, prosecutors obtained three-year prison sentences for nine individuals who transformed a steel factory in Zliten into a covert mining operation (the basis for this article).
Legal experts cited in local media indicate that operators are banking on extremely low electricity costs and fragmented governance to stay one step ahead. Even if large farms are dismantled, thousands of smaller rigs dispersed throughout homes and workshops are far more challenging to locate and collectively impose a significant strain on the grid.
Banned, Yet Not Necessarily Illegal
On paper, Libya is a nation where Bitcoin shouldn’t exist whatsoever. In 2018, the Central Bank of Libya (CBL) issued a public advisory that stated “virtual currencies like Bitcoin are illegal in Libya” and that individuals using or trading them would have no legal safeguards, citing risks connected to money laundering and financing terrorism.
However, seven years later, no specific law exists that clearly prohibits or regulates crypto mining. According to legal expert Nadia Mohammed in The New Arab, Libyan law has yet to explicitly criminalize mining itself. Instead, miners are typically prosecuted for associated activities: illicit electricity use, importing prohibited equipment, or utilizing proceeds for unlawful purposes.
The government has attempted to close some loopholes. A 2022 Ministry of Economy directive prohibits the import of mining hardware, yet machines continue to enter the country through grey and smuggling routes.
Furthermore, the nation’s cybercrime law expands by categorizing cryptocurrency as “a monetary value stored on an electronic medium… not linked to a bank account,” effectively acknowledging digital assets without clarifying whether mining them is permitted.
This ambiguity contrasts sharply with regional counterparts. Algeria has adopted a comprehensive ban on crypto usage, trading, and mining, while Iran follows a mixed approach of licensing and intermittent crackdowns related to its subsidized electricity and power shortages.
For Libya, the outcome is a classic case of regulatory arbitrage. The activity is risky and disapproved of, yet not explicitly prohibited, making it extremely appealing to miners willing to operate in secrecy.
When Miners and Hospitals Share the Same Grid
Libya’s Bitcoin surge is connected to the same fragile grid that sustains hospitals, schools, and households, often just barely. Before 2022, certain regions faced blackouts lasting up to 18 hours daily, as war damage, cable theft, and chronic underinvestment left demand significantly exceeding reliable supply.
Into this system, illegal mining operations introduce a constant, energy-intensive demand. Estimates quoted by Libyan officials and regional analysts suggest that, at its peak, crypto mining consumed about 2% of the national electricity output, roughly 0.855 TWh annually.
The New Arab points out that this electricity is essentially diverted from hospitals, schools, and ordinary households in a nation where many people have already adapted their daily routines around unexpected outages.
Officials have occasionally provided dramatic figures for individual operations, claiming that large facilities can draw 1,000-1,500 megawatts, corresponding to the demand of several mid-sized cities. While these figures may be inflated, they highlight legitimate concerns within the electricity sector: “always-on” mining operations can undo recent advancements and push the network back toward recurrent outages, especially during summer months.
Moreover, there’s a broader resource narrative. Observers connect the cryptocurrency crackdowns to a wider energy and water crisis, where subsidized fuel, illicit connections, and climate stress already challenge the system.
Against this backdrop, every story about clandestine farms converting cheap subsidized energy into private Bitcoin profits risks escalating public resentment, especially when citizens are left in the dark while these operations persist.
Regulate, Tax, or Eradicate?
Libyan policymakers are currently divided on how to handle an industry that undeniably exists, clearly depletes public resources, yet technically resides in a legal limbo.
Economists cited in local and regional media argue that the state should stop ignoring mining’s existence and instead license, meter, and tax it. They reference Decree 333 from the Ministry of Economy, which banned the import of mining equipment, as evidence that authorities already recognize the sector’s scale and suggest that a regulated industry could yield foreign currency and create jobs for young Libyans.
Bankers and compliance professionals advocate a different approach. They contend that mining is too closely connected to electricity theft, smuggling networks, and money laundering risks to be safely managed.
Unity Bank’s systems director has called for even stricter regulations from the Central Bank, cautioning that the rapidly expanding use of cryptocurrency — with around 54,000 Libyans, or 1.3% of the population, already owning crypto by 2022 — is surpassing current safeguards.
This discussion extends beyond Libya. Across several regions of the Middle East, Africa, and Central Asia, a recurring pattern emerges: inexpensive energy, weak institutions, and a burgeoning mining sector.
Analysts at CSIS and EMURGO Africa note that without effective regulation and realistic energy pricing, mining can exacerbate power crises and complicate engagements with lenders like the International Monetary Fund, even if it appears to offer easy profits on paper.
For Libya, the critical challenge is whether it can transition from sporadic raids and import restrictions to a clear stance: either integrate mining into its energy and economic framework or eliminate it in a manner that is truly effective.
