Kazakhstan Clamps Down Crypto Mining Operations, Another Exodus Coming?

Kazakhstani authorities are clamping down crypto mining operations after the country witnessed an energy shortage up until early this year.

In a release dated 15 March, the government authorities have also raised the threats that illegal crypto mining poses to Kazakhstan. The translated release stated, “Head of State, the Financial Monitoring Agency, together with government agencies, carried out comprehensive inspections of the activities of mining farms.”

Following this, 55 mining farms have voluntarily ceased their activities in the region. Meanwhile, 51 illegal mining farms were forced to shut down, as per the note.

What is noteworthy is that these miners have suspended work immediately while dismantling the equipment. However, the release has noted that “work is underway to prevent the involvement of this equipment in the secondary circulation.”

Interestingly, it is also reported that some of these mining equipment were smuggled from China, South Korea, Singapore, Turkey, and Georgia.

As far as the illegal businesses are concerned, the release said that the authorized body was not informed about the activities, as they illegally connected to energy sources. As some reportedly placed their businesses in special economic zones to evade taxes and customs duties. Taking the example of a business in the Karaganda region, the release said that the mining farm illegally carried out activities in the territory of the Saryarka FEZ. Meanwhile, two other greenhouse companies illegally sold their surplus electricity for third parties’ mining without a license.

All in all, the Financial Monitoring Agency registered 25 criminal cases while seizing over 67,000 pieces of equipment worth about 100 billion tenge (around $194 million). And soon after the operation, the statement recorded a reduction in daily electricity consumption of 600 megawatts/hour in the country.

Additionally, the regulator has asked the public to be vigilant against illegal mining, and immediately inform the authorities about any such cases. Also, they further warned, that “Cryptocurrency can serve as a tool for the financing of terrorism, the acquisition of weapons and drugs.”

With that being said, an interdepartmental working group is said to be working on a legislative framework to solve some of these issues. However, if reports are to be believed, many miners have already relocated out of Kazakhstan.

In exchange, pushing out nearly a third of legal mining farms and data centers, according to the Kazakhstan National Blockchain and Data Center Industry Association.

What do you think about this subject? Write to us and tell us!

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.