Energy consumption in the Al-Wafrah region of Kuwait dropped 55 percent almost overnight as authorities raided homes suspected of housing cryptocurrency mining rigs.

The crackdown comes amid a heatwave in which soaring temperatures have caused a strain on the country’s power grid, resulting in blackouts.

Crypto mining “constitutes an unlawful exploitation of electrical power … and may cause outages affecting residential, commercial, and service areas, posing a direct threat to public safety,” said the Kuwait interior ministry.

While crypto trading has historically been illegal in Kuwait, no specific policies have addressed the process of crypto mining.

Kuwait’s Ministry of Electricity said around 100 homes in the Al-Wafrah region were being used for mining, with some of those using more than 20 times more electricity than the average Kuwait home.

Given the country’s abundance of oil, electricity costs in Kuwait are very cheap compared to nations in the West, where the venture is no longer profitable for many.

Recently, it was reported that the value of a single Bitcoin could no longer cover the costs incurred to mine it, essentially rendering the process null and void for many.

Mining costs vary around the world, ranging from $1,324 in Iran, to $321,000 in Ireland. With an average cost of $107,000 in the United States, many US Bitcoin miners can no longer break even.

Regarding the situation in Kuwait, Saud Al-Zaid, a former executive in the Communications and Information Technology Regulatory Authority in Kuwait, said: “They saw government subsidies, saw the absence of oversight, and saw no laws in place, so they exploited the situation to their benefit.”

The value proposition of mining Bitcoin dwindled last year when Bitcoin’s halving event reduced mining rewards from 6.25 BTC to 3.125 BTC. For anyone running a Bitcoin mining rig, this effectively doubled the cost of mining the cryptocurrency, further pushing small, independent miners out of the market, and consolidating the activity among large mining pools.

The next halving event is scheduled for 2028, and will reduce mining rewards to 1.5625 BTC.