Libya’s Crypto Crackdown: The Rise and Fall of a Subsidized Mining Hub

In November 2025, a Libyan court sentenced nine individuals to three years in prison for operating a clandestine Bitcoin mining farm within a steel factory in Zliten. This ruling is the latest move in a massive national crackdown on an industry that, despite Libya’s fragile infrastructure, once accounted for 0.6% of the global Bitcoin hash rate—surpassing all other Arab and African nations.

The Allure of "Almost Free" Power

Libya’s unlikely emergence as a mining hotspot was fueled by one factor: electricity prices as low as $0.004 per kWh. Due to heavy state subsidies, energy in Libya is among the cheapest in the world.

• Arbitrage Opportunity: Miners convert subsidized energy into high-value Bitcoin.
• Hardware Lifecycle: Low costs allow miners to use older, less efficient machines that would be unprofitable elsewhere.
• Grid Strain: At its peak, mining consumed roughly 2% of Libya’s total electricity output, a devastating load for a grid already plagued by theft, war damage, and 18-hour daily blackouts.

A Shadow Industry Under Fire

The boom thrived in a "legal gray area." While the Central Bank declared virtual currencies illegal in 2018, no specific law explicitly banned the act of mining. Instead, authorities are now prosecuting operators for electricity theft, smuggling banned equipment, and money laundering.

Recent Major Enforcement Actions:

• 2023: 50 Chinese nationals arrested; 100,000 devices confiscated.
• 2024: 1,000 devices seized in Benghazi, generating $45,000 monthly.
• 2025: Prison sentences for the Zliten steel factory operators.

The High Cost to Society

While mining generates private wealth, it often comes at the expense of public services. Power diverted to clandestine server rooms — sometimes hidden with cement to mask heat signatures — often leaves hospitals, schools, and homes in the dark. This has turned crypto mining into a flashpoint for public resentment and a major hurdle for the General Electricity Company of Libya (GECOL).

The Future: Regulation or Elimination?

Libyan policymakers are currently divided on the path forward:

1. The Economic View: Some argue for licensing and taxing the industry to generate foreign currency and jobs.
2. The Security View: Bankers and regulators fear that mining is too deeply linked to illicit smuggling and money laundering to be safely integrated.

As Libya continues to battle political fragmentation, the fate of its mining sector remains a cautionary tale of what happens when high-tech industries collide with subsidized energy in a fragile state.

December 2025, Cryptoniteuae