Libyan police detain 50 Chinese nationals in crypto farm bust

Libyan authorities have detained 50 Chinese nationals in a raid of a crypto-mining operation in the west of the country, the prosecution in Tripoli said Thursday.

Mining is the process of verifying transactions on a crypto blockchain by solving mathematical puzzles, for which miners are rewarded with more of the cryptocurrency. It is an energy-intensive process and requires a lot of hardware and electricity.

Prosecutors said in a statement that Interior Ministry agents were searching a farm in Zliten, 160 kilometers (99 miles) east of the capital and found “minors exploiting significant material capacity to generate virtual currencies with the help of 50 Chinese nationals.”

Photos and a video from the Tripoli Attorney General Office’s Facebook page show a dingy-looking, windowless room full of hardware, wires and servers being raided by authorities. Another photo appears to show the outside of the building, which is long and narrow and has dozens of fans at the back of it to keep the servers cool.

Italian newspaper Agenzia Nova reported that the mining farm was found in an old iron factory.

On Wednesday, prosecutors said police had dismantled another illegal crypto-mining operation in the port city of Misrata, adding it was operated by 10 Chinese nationals.

Libya’s Central Bank banned crypto transactions in 2018 because the market had not yet been regulated by the government and there were concerns that it could attract criminals, including terrorist financing. Crypto coin mining is also illegal in Libya.

Yet despite it being outlawed, the cheap electricity in Libya has helped make mining — which requires a large amount of electricity — popular in the Maghrebi country. A 2021 study found that 0.6% of all the world’s bitcoin mining operations take place in Libya.