106 illegal crypto mining firms shut down in Kazakhstan

Kazakhstan is cracking down on cryptocurrency mining firms in the country. The Kazakh government has announced shutting down 106 illegal crypto mining firms. These firms were operating without acquiring the needed licenses.

Out of the 106 mining firms that have been shut down, 55 of them closed their operations voluntarily, while 51 were forced to shut down by the government.

Kazakhstan cracks down on illegal miners

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Kazakhstan is the second-largest Bitcoin (BTC/USD) miner in terms of the mining hash rate. The country is now cracking down on illegal mining operations due to the dangers they pose to its energy sector.

According to Minister Bagdat Musin,

Gray miners are doing a lot of harm to our power grid. The energy costs of illegal mining are estimated to exceed 1 gigawatt.

Law enforcement officials forcefully shut down 51 mining firms because of tax evasion and conducting their operations without regulatory approval.

The investigation also showed that the illegal companies were linked to notable politicians and entrepreneurs. One of these people is a brother to the former president of Kazakhstan, Kairat Itegmenov, and the other is the Chairman of Central Asian Electric Power Corp, Alexander Klebanov.

During the crackdown, officials seized more than 65,000 pieces of mining equipment valued at over $190 million. Criminal charges have also been filed against those linked to the illegal mining firms.

Crypto mining in Kazakhstan

After China banned crypto mining last year, many mining firms fled to overseas locations such as Kazakhstan. Just a few months after the China ban, Kazakhstan’s Bitcoin mining hash rate reached 18.1%, and it is now the second-largest Bitcoin miner after the US.

However, the country’s power grid has felt the effects of increased power usage. The country faced regular blackouts that resulted in violent protests earlier this year.

Since then, the government has cracked down on mining firms that do not have proper licenses. In February, the operations of 13 cryptocurrency mining firms located around the country were halted. It was estimated that the companies used an electricity capacity surpassing 200 megawatts. However, the Kazakh president has said that “white miners” will not be affected by the crackdown.