On March 15th, 2022 the Financial Monitoring Agency (FMA) of the Republic of Kazakhstan released a report that shows their progress on enforcing a ban for unregistered Bitcoin and cryptocurrency miners. Kazakhstan has been experiencing rolling blackouts since the beginning of the year and government agencies have taken steps to mitigate issues with failing infrastructure.
The FMA has determined that illegal Bitcoin and cryptocurrency mining are risking “the economic security” and continue to cause electricity shortages for consumers and businesses. With the consistent growth of the mining industry, President Tokayev, the FMA, and other government agencies gave notice to all known Bitcoin and cryptocurrency mining farms that they must cease operations until granted permission to mine legally.
A total of 55 mining farms voluntarily halted all operations. Many moved their equipment from facilities to be shipped out of the country or in storage. Another 51 mining farms were stopped by enforcement on the claims of being illegally connected to the country’s power grid, lack of permits, and tax evasion.
The report claims that a number of well known businessmen and officials had direct ties to a number of these mining farms. The list includes: Bolat Nazarbayev, Alexander Klebanov, Kairat Sharipbayev, Erlan Nigmatullin, as well as other affiliates of Kairat Itemgenov (one of the richest businessmen in Kazakhstan).
Kazakhstan companies were also on the hook for doing business with an increasing number of mining farms that relocated from China. Various greenhouse companies sold their surplus electricity to unlicensed miners and are now subject to investigation. Mining hardware imports are also reported to have come from South Korea, Singapore, Turkey, and Georgia.
The FMA has registered a total of 25 criminal cases and more than 67,000 mining units after this enforcement. It is reported that the FMA was able to decrease the country’s energy consumption by 600 MWh. This is the equivalent of powering 240,000 to 540,000 homes with coal.
The report states that more regulation is needed in order to slow down illegal miners from taking advantage of the Kazakhstan power grid. The relevant government agencies are working on preventing these miners from operating in other locations within the country. No further details were given on what type of prevention measures will be taken for restored mining farms.