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Tuesday, June 18, 2024

Kazakhstan Shuts Down Over 105 Crypto Mining Farms

Last year Kazakhstan became the second biggest crypto-currency mining country in the world

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Kazakhstan, government terminated operations of more than 105 crypto mining farms as a result of ongoing inspections of the mining sector.

According to a government statement, the investigations is done by the country’s financial monitoring agency and other state bodies, 55 of the crypto mines closed voluntarily, and 51 were forced to shut down due to  illegal mining, the owners of which hadn’t notified authorities of starting activities or had connected their hardware to the power grid without permission. The 51 are suspected of tax and customs evasion and placing equipment in special economic zones without permission.

The inspections revealed that some notable government officials and business figures were involved in crypto mining. According to the statement, they included Bolat Nazarbayev, the brother of former President Nursultan Nazarbayev; Alexander Klebanov, the chairman of Central Asian Electric Power Corp., which provides electricity to more than 2 million people, according to its website; and Kairat Itegmenov, listed by Forbes as Kazakhstan’s 17th richest man.

Last year Kazakhstan became the second biggest crypto-currency mining country in the world, since last year’s crackdown on the industry in China but the rapid growth of crypto-mining in the country has put pressure on the energy sector, which relies heavily on polluting, carbon-intensive coal-fired power stations.

Kazakhstan has been dealing with severe electricity shortages and blackouts, because of the sudden influx of crypto miners from China after the last year’s crackdown on the industry, and also because of infrastructure failures. The government has decided to crack down on illegal mines to deal with the energy problems.

In February, Tokayev has instructed authorities to identify all enterprises minting crypto currencies and verifying their tax, customs, and technical documentation. The agency was expected to conduct the checks together with other government bodies and report back by mid-March.

As per the statement, the government’s financial monitoring agency has opened 25 criminal cases and seized 67,000 machines valued at 100 billion Kazakh tenge ($193 million). The regulator claims the latest crackdown has helped to reduce energy consumption in the country by 600 MWh and In late February, the government said it busted 202 megawatts worth of illegal crypto mines.

The National Association of Blockchain and Data Center Industry of Kazakhstan recently revealed that authorized miners have already moved a third of their equipment out of the country.

 

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