The agriculture authority in Abu Dhabi, United Arab Emirates (UAE), has issued an advisory prohibiting farmers from mining cryptocurrencies on their farms.
UAE’s Ban on Crypto Mining
Khaleej Times reported that the Abu Dhabi Agriculture and Food Safety Authority informed farmers that using farms for cryptocurrency mining is considered a “misuse of the farm for purposes other than its intended use.” Violators of this rule could face penalties of up to 10,000 UAE dirhams. This is about $2,722.
Crypto mining is a popular method for earning cryptocurrencies by confirming transactions on blockchain-based networks. Miners complete mathematical puzzles and secure the network, receiving newly minted crypto as a reward.
While crypto mining is prohibited on farms, the UAE emerged as a pro-Bitcoin mining jurisdiction in the Middle East in 2023. At that time, data showed that the UAE’s combined Bitcoin mining capacity was around 400 megawatts, accounting for 4% of Bitcoin’s global hash rate.
Crypto in the Middle East
Despite the UAE’s crypto-friendly stance, other Middle Eastern countries like Kuwait are less welcoming to digital assets. Last year, Kuwait banned all cryptocurrency-related operations, including mining. Kuwait’s primary financial regulator, the Capital Markets Authority (CMA), confirmed an “absolute prohibition” on crypto use cases, including mining.
Despite differing stances in the region, the UAE remains a hub for many crypto-focused projects. In May alone, blockchain analytics firm Chainalysis and institutional infrastructure provider Blockdaemon expanded their operations into the UAE.
On May 8, Chainalysis opened its regional headquarters in Dubai. The firm has been working with local government agencies. The company offers advice on regulatory development to foster innovation.
Moreover, Blockdaemon on May 13 expanded its operations to the UAE by opening a new office in Abu Dhabi. The Abu Dhabi Global Market approved the company’s expansion plans.
Crypto-native projects see the UAE as very progressive in terms of cryptocurrency. In a previous interview with Cointelegraph, Chainlink co-founder Sergey Nazarov praised Dubai’s government, regulators, legal system, and economic environment as highly attractive to the crypto industry.
Final Words
Even with the crypto-friendly nature of the UAE, authorities have tagged crypto mining on farms as illegal. Anyone found guilty will pay a fine of 10,000 UAE dirhams ($2,722).
Frequently Asked Questions
Is Mining Bitcoin Legal in the UAE?
Yes, mining Bitcoin in the UAE is legal. However, there are strict rules miners have to follow.
What are Crypto Mining Farms?
Crypto mining farms are multiple miners housed in large warehouses.
Can I Invest in a Crypto Mining Farm?
Yes, you can invest in a crypto mining farm. However, you need to do your due diligence before investing.
Is Mining for Cryptocurrency Legal?
It is a bit hard to say. While in some countries it is legal, other countries have placed a ban on it.
Is BTC Banned in Dubai?
No, BTC is not banned in Dubai.
Is Crypto Mining Legal in the UK?
Yes, crypto mining is legal in the UK.
Does Crypto Mining Really Pay?
Yes, crypto mining pays.
