Libya Emerges as Unlikely Bitcoin Mining Hub While China Crackdown Reports Prove Overblown

Libya's Hidden Mining Industry Faces Government Crackdown

In November 2025, Libyan prosecutors handed down three-year prison sentences to nine people caught running Bitcoin miners inside a steel factory in the coastal city of Zliten ^[1]. The court ordered their machines seized and illegally generated profits returned to the state, marking the latest in a series of high-profile raids spanning from Benghazi to Misrata that have netted dozens of Chinese nationals operating industrial-scale farms ^[1].

These enforcement actions are targeting an industry that most outsiders did not know existed. In 2021, Libya accounted for around 0.6% of the global Bitcoin hash rate, according to estimates from the Cambridge Centre for Alternative Finance ^[1]. The North African nation, better known for oil exports and rolling blackouts, became an unlikely mining destination driven by extraordinarily cheap, heavily subsidized electricity ^[1].

The Economics Behind the Boom

Libya's electricity price sits at approximately $0.004 per kilowatt-hour, among the lowest in the world ^[1]. The state heavily subsidizes fuel and keeps tariffs artificially low, even as the grid struggles with damage, theft and underinvestment ^[1].

This pricing creates a powerful arbitrage opportunity for miners, effectively allowing them to buy energy far below real market cost and convert it into Bitcoin ^[1]. The economics change the hardware equation completely: even older-generation machines that would be scrap metal in Europe or North America can generate profit margins when fed with subsidized power ^[1].

On the ground, Libya's mining operations bear little resemblance to professional data centers elsewhere. Reports from Tripoli and Benghazi describe rows of imported ASICs crammed into abandoned steel and iron factories, warehouses and fortified compounds, often in industrial zones where heavy electricity use does not immediately raise eyebrows ^[1].

Legal Gray Zone Complicates Enforcement

Despite the crackdowns, Bitcoin mining exists in a legal vacuum in Libya. In 2018, the Central Bank of Libya issued a public warning that "virtual currencies such as Bitcoin are illegal in Libya" and that anyone using or trading them would have no legal protection, citing money laundering and terrorism financing risks ^[1].

However, seven years later, no dedicated law clearly outlaws or licenses crypto mining. As legal expert Nadia Mohammed told The New Arab, Libyan law has not explicitly criminalized mining itself ^[1]. Instead, miners are typically prosecuted for surrounding issues: illegal electricity consumption, importing banned equipment, or using proceeds for illicit purposes ^[1].

At its peak, crypto mining consumed roughly 2% of national electricity output, approximately 0.855 TWh annually ^[1]. This strain on Libya's fragile grid comes as parts of the country experienced blackouts lasting up to 18 hours daily before 2022 ^[1].

Libyan policymakers remain divided on how to address the industry. Some economists argue the state should license, meter and tax mining operations rather than pretend they don't exist, pointing to Decree 333 from the Ministry of Economy, which banned mining equipment imports, as proof authorities already recognize the sector's scale ^[1].

China Mining Disruption Reports Exaggerated

Meanwhile, reports of a renewed Bitcoin mining crackdown in China this week proved less significant than initially claimed. Jianping Kong, a former executive at hardware producer Canaan, reported that some operations in the Xinjiang region had been shut down ^[2].

Early estimates circulating on social media suggested 400,000 to 500,000 mining machines may have gone offline ^[2]. However, subsequent reporting and industry analysis indicated the disruptions were more likely tied to compliance or operational issues rather than a broad, coordinated enforcement campaign ^[2].

Despite China's nationwide mining ban in 2021, Bitcoin mining activity has resurfaced in the country. Data from CryptoQuant suggests China may account for roughly 15% to 20% of global Bitcoin mining activity ^[2]. Xinjiang has attracted miners due to abundant and relatively low-cost energy supply, while local governments have invested heavily in data center infrastructure, with some facilities reportedly leasing excess capacity to Bitcoin miners to offset cyclical declines in demand from other computing workloads ^[2].