Kazakhstan’s Financial Monitoring Agency has launched a preliminary inquiry into a cryptocurrency mining operation that is reportedly operating as a financial pyramid scheme as part of increased measures to combat fraud connected to cryptocurrencies. According to the FMA, it is being directed by the watchdog’s section in the West Kazakhstan area. Through the Whatsapp and Telegram messengers, the folks behind the Bincloud mining hotel attracted investors and persuaded them to invest by promising to rent out mining equipment. They were guaranteed a daily return on investment of between 5 and 6 percent.
According to a press announcement, the fraudsters withheld 16% of the hotel guests’ pay. Financial watchdogs in Kazakhstan are advising anybody who may have fallen victim to the alleged Ponzi scam to get in touch with the local offices of the Financial Monitoring Agency and report their cases. The Bincloud probe is a part of a government campaign to combat cryptocurrency-related criminality. The authorities in Kazakhstan recently nabbed a group whose members reportedly coerced IT professionals into managing covert crypto farms on their behalf.
Did They Have Some Connections?
An estimated half million dollars in monthly income was generated by the illicit mining enterprise for its operators. According to media sources, the criminal organization could not have carried out its plan without protection or some connection to powerful politicians or businesses, as with prior such operations. When China started to tighten down on the business in May 2021, Kazakhstan maintained artificially low power costs and started to attract crypto mining companies. Since then, things have shifted, and several businesses have already relocated their hardware to additional mining hubs.
Although President Kassym-Jomart Tokayev’s government has said that it wants to boost the nation’s cryptocurrency business, the rising energy shortage attributed to the flood of miners has affected its policy in the field. It has also begun clamping down on illicit mining. The chief of state of Kazakhstan stated in February that the Nur-Sultan administration is not opposed to legal crypto mining but stressed that all mining operations should be identified and examined by the FMA. During the chilly winter months, mining businesses were experiencing power outages when the directive was issued.
A bill that increased the tax burden for registered mining businesses was signed by Tokayev in July. The legislation increased the levy imposed at the beginning of the year and implemented differential tax rates depending on the average price of the power required to manufacture digital currencies.
Source: https://www.thecoinrepublic.com/2022/08/12/a-crypto-ponzi-scheme-kazakhstan/