How Cheap Power Made Libya a Bitcoin Mining Hotspot

Takeaways

• Libya’s cheap electricity, which is subsidized by the government, made it lucrative to run older and inefficient Bitcoin miner.

• Libya generated approximately 0.6% of global Bitcoin hashrate at its height.

• The mining industry operates within a grey area of law, as hardware imports are prohibited but there is no specific legislation governing the actual mining.

• The authorities are intensifying raids on illegal mines, and are pursuing criminal charges.

On November 20, 2025, Libyan prosecutors secretly handed out three-year prison terms to nine individuals caught running. Bitcoin miners Inside a steel plant in Zliten, a coastal city.

A court in Libya ordered the confiscation of their equipment and that the profits illegally made be returned to the government. The raid was the latest high-profile operation which has swept Benghazi, Misrata and even dozens of Chinese who operated industrial scale farms.

These crackdowns target an industry which, up until very recently, few outsiders knew existed. Libya, which is better known for its oil exports and rolling power outages, contributed 0.6% to the global economy in 2021. Bitcoin hash rate. It was ahead of many other Arab, African and European countries. according The Cambridge Centre for Alternative Finance has released estimates.

The rise in mining was fueled by the cheap and heavily subsidised electricity, and an extended period of institutional and legal ambiguity which allowed miner’s to expand faster than legislators could respond.

The sections below will explain how Libya has become a mining hotspot. We’ll also examine why the grid in Libya is under extreme strain, and the implications of the government crackdown on Bitcoin.BTCMiners working in unstable states

Did You Know? Libyans have been able to access the internet since 2011. had There are more than 12 rival governments or militias. This creates long periods of time when there is no authority that can implement national level energy and economic policies.

Economics and “almost free” electricity

Libya’s mine boom begins with a figure that is almost impossible to believe. According to some estimates, the electricity cost in Libya is around $0.004 Per kilowatt, the cost is one of the lowest on the planet. The state has heavily subsidised fuel, and kept tariffs artificially lower, even though the grid was struggling to deal with damages, thefts, and underinvestment.

Such pricing can be a great arbitrage from an economic standpoint. In effect, you are buying the energy at a price far lower than its actual market value and turning it into Bitcoin.

This completely changes the equation for miners. Only the most recent, efficient ASICs have a shot at remaining profitable in high-cost markets. As long as Libyans are able to feed older machines with subsidised power, they can even generate a profit.

This makes it attractive to foreign companies willing to accept the legal and political risks and ship used drilling rigs.

According to regional analyses, Bitcoin mining may have consumed around 2%, or 0.855 Terawatt Hours, of Libya’s electricity production at its highest point, which was in 2021.

A wealthy and stable grid might allow for this level of usage. Diversion of this amount of subsidized electricity into private server rooms in Libya is an issue, as rolling blackouts already occur on a regular basis.

Libya stands out on the global hash map because of its low population, damaged electrical infrastructure and poor electricity.

Did You Know? Due to grid damage, thefts and other technical problems, up to 40 percent of the electricity produced in Libya never reaches its homes. according General Electricity Company of Libya

Underground mining in Libya: A look at the boom

Libya’s recent mining boom is nothing like the glitzy data centers in Texas and Kazakhstan. The reports coming out of Tripoli and Benghazi show rows of ASICs packed into abandoned factories and warehouses, as well as fortified compounds. This is often in the industrial zone or on the edge of cities where high electricity consumption does not raise any eyebrows.

Did You Know? Some operators in Libya try to avoid detection reportedly Pour cement on parts of their set-ups to obscure heat signatures. This makes it more difficult for the authorities to detect them with thermal imaging.

It is amazing to see how fast this economy has grown. In 2018, Central Bank of Libya declared virtual currencies It is illegal to sell or use these products, as they are linked with money laundering and terrorist financing risks.

By 2021 analysts estimate Libya is responsible for about 0.6% global Bitcoin hashrate, with the highest percentage in the Arab and African world.

Raids since then have shown how widespread the problem is. In April 2024 security forces in Benghazi confiscated more than 1,000 items from a hub that was earning $45,000 monthly.

In one of the largest crypto-busts on the continent, 50 Chinese citizens were arrested and around 100,000 devices were reportedly confiscated.

Nine people were sentenced to three years in prison by prosecutors at the end of 2025 for converting a Zliten Steel Factory into a secret mining farm. (This article was inspired by this case).

According to legal experts cited in the local press, operators gamble that their low-cost electricity and fragmented regulation will allow them to stay ahead. Even if some large farms are removed, thousands will still be affected. smaller rigs The batteries scattered throughout homes and workshop are harder to locate and add up to an enormous load on the power grid.

It is not entirely illegal, but it has been banned

In theory, Bitcoin is not allowed in Libya. In 2018, The Central Bank of Libya published a public warning You can also find out more about us here. “virtual currencies such as Bitcoin are illegal in Libya” Anyone using them or trading in these products would be without legal protection. The risks associated with money laundering and terrorist financing were cited.

Seven years on, crypto mining is not explicitly criminalized or licensed by law. According to Nadia Mohammed, a legal expert who spoke with The New Arab about Libyan laws, mining is not criminalized in Libyan legislation. Miners are typically prosecuted based on the circumstances surrounding their mining activities: for example, illegal electricity usage, for importing prohibited equipment, or for using profits for illicit purposes.

There are some areas where the state is trying to make up for lost time. The Ministry of Economy issued a decree in 2022 that prohibits mining equipment imports, but machines are still imported via grey or smuggling channels.

Cybercrime is defined in the law as cryptocurrency. “a monetary value stored on an electronic medium… not linked to a bank account,” It is not legal to mine digital assets if they are acknowledged.

This ambiguity is in stark contrast with regional peers. Algeria criminalized crypto trading, mining and use. Iran has a patchwork system of licenses and crackdowns linked to power shortages and subsidies.

In Libya, this is a classic example of regulatory arbitrage. Mining is frowned on and frowned at, yet it remains legal.

Mines and hospitals sharing the same grid

Libya’s Bitcoin Boom is connected to the same grid that runs hospitals, schools, and households, sometimes just barely. Prior to 2022, some areas of the country experienced blackouts that lasted for upto 18 hours A day as demand was far greater than supply due to war damages, cable theft, and chronically low investment.

In this system, the illegal mining farms create a continuous, energy-consuming load. Libyan officials cited estimates that crypto mining was at its height consuming around 2% of the national electricity production, which is about 0.855 terawatt hours per year.

The New Arab points out that the power is being diverted from hospitals. Schools and everyday households. In a country in which many people plan their days around unplanned blackouts, this will be a major inconvenience.

The official numbers can be eye-catching. They claim that large farms are capable of drawing 1,000-1,500 Megawatts. This is the equivalent to several mid-sized city’s demand. These numbers may be exaggerated. However, they do reflect the real concern of the electric company. “Always-on” The mining load can cause the network to go backwards and experience rolling blackouts. This is especially true in the summer.

A broader story is told about resources. Commentators connect the crypto crackdown with a broader energy and water crises, in which subsidized fuels, illegal connections, climate stress, and unauthorized connections already put pressure on the system.

In this context, any story that reveals clandestine farms converting cheap power subsidized by the government into Bitcoins for private income could exacerbate public discontent, especially when the people remain in the dark as the rigs continue to run.

Tax or regulate?

The Libyan government is divided over how to deal with a sector that exists and consumes resources, but lives technically in an unregulated legal vacuum.

In local and regional press, economists argue the state must stop pretending that mining doesn’t exist. Instead it should meter, license and tax this industry. According to them, Decree 33 from the Ministry of Economy which prohibited the import of mining machinery is proof of how authorities have already recognized the scale of this sector.

Banking officials and compliance officers have a different view. According to them, the mining industry is too closely tied with electrical theft, smuggling and money laundering risk for normalization.

Unity Bank’s systems director has called for even tougher rules from the Central Bank, warning that rapidly growing crypto use — an estimated 54,000 Libyans, or 1.3% of the population, already holding crypto in 2022 — is outpacing existing safeguards.

This debate goes beyond Libya. The same formula is repeated in parts of Africa, Central Asia and the Middle East: low-cost energy, weak institutional frameworks and ana hungry mining industry.

CSIS analysts and EMURGO Africa have noted that mining cannot be sustainable without realistic pricing and credible regulations. deepen Power crises complicate relations with lenders such as the International Monetary Fund even though it appears easy money.

The real test for Libya is whether or not it can go from raids and bans on imports to making a choice that sticks: integrate mining in its financial and energy strategy, or close it.