Libya’s crypto boom goes underground

In the midst of Libya’s volatile political divide, a new and largely invisible economy is taking root—one that is decentralised, lucrative, and increasingly beyond the reach of state control.

Bitcoin mining, officially banned and inherently power-hungry, is surging across the country, transforming Libya into one of the most active, though unofficial, cryptocurrency mining hubs in the Arab world and Africa.

This unlikely boom is fuelled by a unique confluence of factors, foremost among them being Libya’s heavily subsidised energy sector. With electricity priced as low as $0.004 per kilowatt-hour—among the cheapest globally—miners enjoy near-unprecedented profit margins. Their operations run continuously, solving complex cryptographic puzzles that secure blockchain transactions in exchange for Bitcoin rewards.

“Electricity in Libya is virtually free for most consumers, and diesel is similarly subsidised,” said economic analyst Sami Radwan. “This creates an economic environment unlike anywhere else. It’s no surprise that both Libyan and foreign actors are rapidly setting up mining farms across the country to exploit these conditions.”

Although the Central Bank of Libya outlawed virtual currencies in 2018—citing risks related to money laundering and terrorism financing—cryptocurrency mining has thrived in a legal vacuum. By 2021, Libyan miners were estimated to account for around 0.6% of the global Bitcoin hash rate, placing the country ahead of every Arab and African state, and surpassing several European nations.

Yet this unregulated digital gold rush has come at a steep cost.

At its peak, Bitcoin mining was believed to consume up to 2% of Libya’s total electricity supply. Individual sites reportedly draw between 1,000 and 1,500 megawatts—equivalent to the demand of several medium-sized cities. This surge in consumption has further strained an already fragile power grid, triggering widespread blackouts and exacerbating public discontent.

More troubling still is the increasing involvement of armed factions—most notably militias loyal to Saddam Haftar, son of eastern commander Field Marshal Khalifa Haftar. In eastern and southern regions under their control, mining operations are not only tolerated but actively protected.

Sources familiar with the matter told Libyan Express that many of these operations are sophisticated and deeply entrenched. Militias provide secure locations, unimpeded access to electricity and internet infrastructure, and logistical support in exchange for a share of the profits—often converted into hard currency through informal financial networks.

“These groups operate with near-total impunity,” one official said. “Local authorities are either powerless or unwilling to intervene.”

Operators are also reportedly using elaborate methods to evade detection, including burying equipment beneath layers of concrete to obscure thermal signatures and concealing rigs within fortified compounds guarded by armed units.

While the General Electricity Company of Libya (GECOL) has made progress in stabilising the grid—especially in Tripoli, where outages have significantly declined since mid-2023—officials warn that illegal mining continues to undermine national energy security.

At the same time, Libya’s growing internet penetration has accelerated crypto adoption. As of early 2024, an estimated 6.13 million Libyans—roughly 88% of the population—were online. Despite the official ban, a 2022 study estimated that more than 54,000 Libyans owned cryptocurrency. That figure is expected to rise, fuelled by digital awareness and weak enforcement.

Authorities have carried out intermittent raids, seizing mining equipment and detaining foreign technicians—particularly Chinese nationals—but without a national regulatory framework, these actions remain reactive and largely ineffective.

Experts have called for comprehensive legal reform to regulate the industry through licensing, taxation, and incentives for renewable energy use. Yet many caution that any attempt to formalise the sector will fail unless the state can reassert control over territory currently dominated by militias.

“This isn’t just about electricity,” a Tripoli-based energy official told Libyan Express. “It’s about sovereignty over the next phase of Libya’s economy. Right now, that power lies not with the state—but with those who control the generators, the networks, and the guns.”