Miners Have Moved 30% of Their Equipment Out of Kazakhstan – Industry Organization Claims

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Miners Have Moved 30% of Their Equipment Out of Kazakhstan – According to Kazakhstan’s mining organization, authorized crypto mining companies have already taken a third of their coin minting hardware out of the country. The announcement comes as a result of electricity shortages and impending tax hikes, which are driving miners out from Central Asia.

Companies who are lawfully operating mining facilities in Kazakhstan have already transferred roughly 30% of their equipment. Alan Dorjiyev, President of Kazakhstan’s National Association of Blockchain and Data Center Industry, told Forklog about the transfer.

According to the CEO, miners have been hurt by persistent energy supply worries as well as an expected tax rise. His organization represents large enterprises active in the extraction of digital currencies, which account for 70% of Kazakhstan’s cryptocurrency mining industry.

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Also Read: Swiss Crypto Bank SEBA Gets License to Operate in UAE Financial Center

According to the report, Kazakhstan’s parliament is preparing to levy a tax on miners of 10 tenge (about $0.02) per kilowatt-hour (kWh) of power generated from indigenous energy resources and 5 tenge per kWh for imported electrical energy.

The charge on electricity produced from natural gas and renewable sources, except hydropower, will be 3 tenge per kWh if lawmakers approve the proposed changes.  Authorities in Nur-Sultan imposed a 1 tenge ($0.0023 at the time) tax per kWh of power used to mint cryptocurrency in 2021.

Following China’s decision to initiate a nationwide crackdown on the mining industry in May, Kazakhstan became a mining hotspot, thanks to its controlled electricity costs. Mining corporations were initially welcomed in the country, but their energy-intensive operations have since been blamed for the country’s growing power shortage.

In order to address the shortages, the authorities increased electricity imports from Russia and shut down legitimate mining farms during the winter outages. The Ministry of Energy, the Financial Monitoring Agency, and law enforcement have all gone after illegal miners on President Kassym-Jomart Tokayev’s orders.

Also Read: Kazakhstan Cracks Down on Illegal Mining, Busts 13 Crypto Farms

Dorjiyev went on to say that the country is slowly turning into an “unfavorable jurisdiction for the crypto mining business.” He also cautioned that Kazakhstan would lose its dominant position in the bitcoin network in terms of processing power.

The country’s contribution of worldwide hashrate had reached 18 percent as of August 2021, second only to the United States.

Tokayev’s administration temporarily closed banks and restricted internet access in early January to quiet protests over rising fuel prices. The mining industry was also affected by the measures. Some mining corporations have already relocated to other countries, such as the United States, due to political unrest and power outages.

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