On June 22, authorities in Libya searched and arrested several individuals as part of their efforts to combat illegal cryptocurrency mining in the country. A raid on a data center resulted in the arrest of 50 Chinese nationals.
Libya’s crackdown on illegal cryptocurrency mining
during seek By agents of the Ministry of the Interior at a farm in Zliten, located 160 kilometers east of Tripoli, they reported that minors were generating virtual currencies with the help of detained Chinese personnel.
In a video shared on Facebook by the Tripoli Public Prosecutor’s Office, cryptocurrency mining operations took place in windowless structures, housing several industrial fans and a large amount of computers and hardware.
This happened shortly after prosecutors announced the dismantling of another illegal cryptocurrency mining farm in the coastal city of Misrata, run by 10 Chinese nationals.
In 2018, the Central Bank of Libya banned all cryptocurrency transactions until regulatory legislation around the blockchain was implemented. This has not stopped people and entities from engaging in crypto mining activities in the country.
Interestingly, Libya has emerged as a prominent hub for cryptocurrency mining operations. The deteriorating living conditions and economic situation in the country, coupled with the significantly lower cost of electricity and operations in Libya, makes the country a tempting location for bitcoin mining operations.
Bitcoin uses a proof-of-work consensus algorithm and requires powerful servers, stable power supply, and my own internet connection.
Regulatory challenges surrounding cryptocurrency
Many countries around the world, such as China, Nepal, Afghanistan, and Morocco, have banned cryptocurrency mining activities outright due to concerns about environmental impact and illegal activities surrounding crypto anonymity.
Another 42 countries, including Algeria, Bahrain, Bangladesh and Bolivia, have tacitly banned digital currencies by restricting the ability of their banks to handle cryptocurrency transactions and cryptocurrency exchanges.
The reasons behind their tough stance vary. Some, like China, worry about the environmental impact of mining. Others, such as India, are concerned that cryptocurrencies may facilitate illicit activities.
In June 2023, a 21-year-old French citizen was convicted by the Moroccan government Use Bitcoin illegally, resulting in an 18-month prison sentence and €3.4 million in fines. The suspect used a crypto exchange to buy and sell bitcoin to cover his tracks.