Public prosecutors in the Libyan city of Zliten have arrested 10 Chinese nationals for setting up an illegal crypto-mining operation in a disused iron factory on the western coast of Libya. 

Photos and videos published online by the office of Libyan Attorney General Siddiq Al-Sour show officials dismantling huge processing systems uncovered in the city of Zliten, to the east of Tripoli province. 

“We are investigating two cryptocurrency mines in the jurisdictions of Tripoli and Misrata,” said the Attorney General's office in a Facebook post.

“10 Chinese nationals have been apprehended, who were found in possession of the computers performing complex calculations.” 

The devices and equipment found have been seized pending further investigation and the Chinese nationals held in custody, according to the statement. 

#صور.. مكتب النائب العام يعلن القبض على 50 صينيا يقومون بعمليات تعدين العملات المشفرة بمصنع حديد في زليتن بالمخالفة للقانون، بما يضر بالمال العام والمصلحة العامة.#ليبيا #وكالة_وسط pic.twitter.com/5gAj6K5o2V

— وكالة وسط العربية (@AACNEWSLY) June 22, 2023

Crypto-currency mining is officially banned in Libya but has soared in popularity despite the prohibition, with Libya accounting for around 0.6% of all the world’s Bitcoin according to one study in 2021 - the highest percentage in all of Africa. 

Libya’s low electricity costs - $0.004 per kilowatt hour, around 40 times cheaper than the US - make the country ideal for the high energy consumption required to keep crypto mines functioning. 

Mining Bitcoin requires huge amounts of computational power, which in turn requires large amounts of electricity. 

But as Libya has continued to struggle with rolling power blackouts lasting for up to 18 hours a day during the summer, authorities are trying to clamp down. 

Disputed Tripoli-based Libyan prime minister Abdulhamid Dbeibah has even blamed the electricity blackouts on massive energy usage by bitcoin farms across the country. 

“Libya is a key global hotspot for digital currency factories,” said Dbeibah in July last year, promising to clamp down on their energy usage. 

However, with Libya’s electrical capacity meeting only two-thirds of peak summer demand in recent years, clamping down on crypto-mining enterprises will only partially solve the problem of chronic under-investment in Libya’s power grid. 

Cryptocurrencies have risen in popularity in recent years but remain closely associated with illegal transactions, such as drugs, guns, forged documents, and even illegal pornography.

However, greater attention is being paid to the virtual currency by legitimate financial organisations, and some central banks are beginning to explore how they can cash in on Bitcoin's growing popularity.