Kazakhstan ramps up power consumption for crypto miners

    As the country attempts to reduce electricity use, cryptocurrency mining companies will be obliged to give detailed details about their operations. Kazakhstan has issued new reporting rules for cryptocurrency mining companies, with a focus on how the industry’s energy use affects the local power infrastructure.

    The country’s Minister of Digital Development issued an order earlier this week requiring digital mining companies to disclose detailed information 30 days before beginning operations. Before beginning operations, the electricity usage and “technical specifications” for connecting to the power grid must be specified. The amount and type of mining equipment employed, as well as customs cargo declarations for that equipment and any future investments, must all be included.

    Kazakhstan to follow China’s leads

    After the Chinese government tightened down on crypto mining in mid-2021, Kazakhstan was inundated with miners. The Kazakhstan government was obliged to act after the increased use of mining rigs in the country strained the country’s energy supply, cutting off electricity to miners at times.

    Miners must also give information about the legal company carrying out the operation, which must be a resident of Kazakhstan, as well as contact information, as well as physical and IP addresses utilized in its activities, according to the new reporting criteria. The same data will have to be updated and presented in a mandatory quarterly report, and firms that are closing down mining activities will have to declare when they do so.

    The new order replaces a previous order issued by the Minister in October 2020 that established standards for disclosing information concerning digital mining activities.

    Kazakhstan to raise power rates for crypto miners

    In February, proposals were presented to raise power rates and boost taxes on crypto miners, proposing a 335 percent increase in electricity bills as well as abolishing the VAT exemption on mining equipment and taxing each piece individually. Kazakhstani officials have been striving to eradicate illegal cryptocurrency mining activities in the country due to the strain they create on the country’s electrical supply. Following investigations by the Financial Monitoring Agency in March, 106 illegal crypto mining enterprises were shut down, with over 67,000 pieces of equipment seized.

    According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), Kazakhstan had over 18 percent of the world’s BTC hash rate in August 2021, second only to the United States.

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