Key takeaways
Libya’s inexpensive, subsidized electricity enabled even older, less efficient Bitcoin miners to operate profitably.
At its peak, Libya reportedly contributed around 0.6% to the global Bitcoin hash rate.
Mining operates in a legal grey area, as hardware imports are banned, but there is no clear law governing mining.
Authorities are now associating illegal mining operations with power shortages and are intensifying raids and prosecutions.
In November 2025, Libyan prosecutors quietly issued three-year prison sentences to nine individuals caught operating Bitcoin miners in a steel factory in Zliten.
The court ordered the seizure of their machines and the return of illegally generated profits to the state, marking the latest in a series of high-profile raids from Benghazi to Misrata, including the arrest of dozens of Chinese nationals running large-scale mining operations.
These crackdowns target an industry that, until recently, was largely unknown to outsiders. In 2021, Libya, better known for its oil exports and frequent blackouts, accounted for about 0.6% of the global Bitcoin hash rate—surpassing all other Arab and African nations and even several European countries, according to estimates from the Cambridge Centre for Alternative Finance.
This unexpected rise was fueled by cheap, heavily subsidized electricity and a prolonged period of legal and regulatory ambiguity that allowed miners to proliferate faster than lawmakers could respond.
In the upcoming sections, we will explore how Libya became a clandestine mining hotspot, the significant strain on its electricity grid, and the implications of the government’s intensifying crackdowns for Bitcoin (BTC) miners operating in fragile environments.
Did you know? Since 2011, Libya has had more than a dozen rival governments, militias, or centers of power, resulting in long periods where no single authority could implement national energy or economic policies.
The economics of “almost free” electricity
Libya’s mining boom starts with a figure that seems almost too good to be true. Some estimates place the country’s electricity price at about $0.004 per kilowatt-hour, among the lowest globally, made possible by heavy state subsidies on fuel and artificially low tariffs, despite the grid suffering from damage, theft, and underinvestment.
From an economic standpoint, such low pricing creates a lucrative arbitrage for miners, allowing them to buy energy well below its actual market cost and convert it into Bitcoin.
This dramatically alters the hardware dynamics for miners. In high-cost markets, only the most advanced and efficient ASICs can remain profitable. In Libya, however, even older-generation machines that would be considered obsolete in Europe or North America can still yield profits when supplied with subsidized power.
This scenario makes Libya appealing to foreign operators willing to ship in used equipment and accept associated legal and political risks.
Regional analyses indicate that, at its peak around 2021, Bitcoin mining in Libya may have accounted for nearly 2% of the country’s total electricity production, approximately 0.855 terawatt-hours (TWh) annually.
In a wealthy, stable power grid, such consumption levels might be manageable. However, in Libya, where rolling blackouts are commonplace, diverting so much subsidized electricity to privately operated server rooms poses a significant problem.
On the global mining map, the US, China, and Kazakhstan still lead in absolute hash rate, but Libya’s contribution is notable for being achieved with a small population, compromised infrastructure, and extremely low electricity costs.
Did you know? Libya loses up to 40% of its generated electricity before it reaches consumer households due to grid damage, theft, and technical losses, according to the General Electricity Company of Libya (GECOL).
Inside Libya’s underground mining boom
On the ground, Libya’s mining boom bears little resemblance to a sophisticated data center in Texas or Kazakhstan. Reports from Tripoli and Benghazi depict rows of imported ASICs crammed into derelict steel and iron factories, warehouses, and fortified compounds, often located on city outskirts or in industrial zones where heavy electricity consumption remains relatively unnoticed.
Did you know? To avoid detection, some operators in Libya reportedly pour cement over sections of their setups to obscure heat signatures, making it more difficult for authorities to detect them via thermal imaging.
The enforcement timeline illustrates the rapid growth of this underground economy. In 2018, the Central Bank of Libya deemed virtual currencies illegal for trade or use, citing concerns about money laundering and terrorism financing.
Yet by 2021, estimates indicated that Libya accounted for around 0.6% of the global Bitcoin hash rate, the highest share in the Arab world and Africa.
Since then, raids have showcased the depth of these activities. In April 2024, security forces in Benghazi seized over 1,000 devices from a single location believed to be generating approximately $45,000 monthly.
A year prior, authorities apprehended 50 Chinese nationals and reportedly confiscated around 100,000 devices in one of the continent’s largest cryptocurrency busts.
In late 2025, prosecutors secured three-year prison sentences for nine individuals who converted a steel factory in Zliten into an illicit mining operation (the basis for this article).
Legal experts cited in local media indicate that operators are banking on the hope that low electricity prices and fragmented governance will keep them ahead of law enforcement. Even if a few large operations are dismantled, thousands of smaller rigs spread across homes and workshops are much harder to locate and collectively contribute significantly to grid pressure.
Banned, yet not exactly illegal
On the surface, Libya is a nation where Bitcoin should not exist at all. In 2018, the Central Bank of Libya (CBL) issued a public warning marking “virtual currencies such as Bitcoin as illegal” and declared that anyone engaging in them would possess no legal protections, citing risks of money laundering and terrorism financing.
However, seven years later, there remains no specific law that outright bans or licenses crypto mining. As legal expert Nadia Mohammed pointed out to The New Arab, Libyan law has not explicitly criminalized mining itself. Instead, miners generally face charges associated with surrounding activities: illegal electricity consumption, importing prohibited equipment, or using proceeds for nefarious purposes.
The government has attempted to close some loopholes. A 2022 decree from the Ministry of Economy prohibits the import of mining hardware, yet devices continue to enter through grey and smuggling channels.
The country’s cybercrime law goes further by defining cryptocurrency as “a monetary value stored on an electronic medium… not connected to a bank account,” effectively recognizing digital assets without articulating whether mining them is lawful.
This ambiguity contrasts sharply with regional counterparts. Algeria has enacted a blanket prohibition against crypto use, trading, and mining, while Iran employs a patchwork of licensing and intermittent crackdowns related to its subsidized electricity and power shortages.
For Libya, the outcome is classic regulatory arbitrage: the activity is risky and socially frowned upon but not clearly outlawed, rendering it extremely appealing to miners willing to operate underground.
When miners and hospitals share the same grid
Libya’s Bitcoin boom is connected to the same fragile electricity grid that powers hospitals, schools, and homes, often just enough to keep them operational. Prior to 2022, parts of the country experienced blackouts lasting up to 18 hours daily, due to war damage, cable theft, and chronic underinvestment resulting in a demand exceeding reliable supply.
In this context, illegal mining farms introduce a constant, energy-intensive load. Estimates from Libyan officials and regional analysts suggest that, at its peak, crypto mining consumed around 2% of the nation’s electricity output, approximately 0.855 TWh annually.
The New Arab reports that this is energy effectively diverted from hospitals, schools, and households, in a country where many residents are already accustomed to organizing their daily lives around sudden power outages.
Officials have previously provided dramatic figures regarding individual mining operations, claiming that large farms can draw 1,000-1,500 megawatts, equivalent to the demand of several mid-sized cities. While these numbers may be exaggerated, they indicate a genuine concern within the electricity company: persistent mining loads could reverse recent improvements and lead to a return of rolling blackouts, especially during the summer months.
There is also a broader resource narrative. Commentators link the crackdown on cryptocurrency mining to a larger energy and water crisis, where subsidized fuel, illegal connections, and climate stress already place heavy burdens on the system.
Against this backdrop, every report of clandestine farms converting cheap, subsidized electricity into private Bitcoin profits risks fueling public discontent, particularly when the populace experiences blackouts while the rigs continue to operate.
Regulate, tax or stamp it out?
Libyan policymakers find themselves divided regarding the future of an industry that undeniably exists, clearly consumes public resources, yet functions without clear regulations.
Economists cited in local and regional media argue that the government should stop pretending mining does not exist and instead proceed to license, meter, and tax it. They reference Decree 333 from the Ministry of Economy, which prohibited the import of mining equipment, as evidence that authorities already acknowledge the scale of the sector and suggest that a regulated industry could attract foreign currency and provide employment for young Libyans.
Conversely, bankers and compliance officers advocate for stricter norms. They argue that mining is too inextricably linked to electricity theft, smuggling operations, and money laundering risks to be safely normalized.
Unity Bank’s systems director has called for even stricter regulations from the Central Bank, warning that the rapid growth of cryptocurrency usage—an estimated 54,000 Libyans, or 1.3% of the population, already held crypto in 2022—outpaces existing safeguards.
This debate extends beyond Libya. Across various regions in the Middle East, Africa, and Central Asia, the same pattern is frequently observed: low energy costs, weak institutions, and a burgeoning mining sector.
Analysts from CSIS and EMURGO Africa argue that without credible regulations and practical energy pricing, mining could exacerbate power crises and complicate relationships with creditors like the International Monetary Fund, even if it appears lucrative on paper.
For Libya, the critical challenge is to transition from ad hoc raids and bans on imports to a definitive decision: integrate mining into its energy and financial strategy, or implement a shutdown that is effective.
