Illegal Crypto Mining Facilities Busted in Kazakhstan Amid Prevailing Power Crisis

Crypto mining, the process of generating assets such as Bitcoin, is legally permitted in Kazakhstan, but only via authorised mining facilities. A total of 13 crypto mining facilities have been busted in Kazakhstan that were consuming huge chunks of electricity to generate Bitcoin, illegally. The Ministry of Energy of the Republic of Kazakhstan conducted raids after having identified illegal crypto mining farms in cities and regions like Karaganda, Turkistan, Pavlodar, Akmola, and Kostanay. Illegal crypto miners are also called grey miners.

The development comes under the backdrop of Kazakhstan trying to manage its power supply. Since crypto mining is legal in the country, its grids have been bearing the loads the mining machines require.

“As a result of inspections conducted over the past five days, mobile groups identified and stopped 13 mining farms with a total power consumption of 202 Megawatt,” an official statement (translated) from the government of Kazakhstan read.

Bitcoin miners in the Karagandy region were using the most amount of power, over 31MW, compared to other regions where grey mining operations were cracked.

Other regions of Pavlodar, Shymkent, Turkistan, Akmola, Kostanay, Nur-Sultan, and Almaty ranked behind Karaganda.

“The work of the mobile group to identify and disconnect mining farms from the electrical networks will continue, and the authorised bodies are also conducting operational and investigative measures for the identified mining farms,” the government's official statement added.

Earlier this month, Kazakhstan President Kassym-Jomart Tokayev had instructed authorities to increase the tax on electricity for crypto-mining outfits.

Crypto mining, as a process, picked up pace in Kazakhstan after China imposed a blanket ban on all crypto activities last September.

Since the process of crypto mining is power intensive, it has been known to disrupt electricity distribution in other parts of the region. Miners have to solve complex algorithms on advanced computers to be able to mine cryptocurrencies.

Kazakhstan, with its awaited laws on crypto mining, also intends to curb grey mining activities where people set up power-consuming machines in their houses, garages, and balconies to generate crypto assets.

All crypto mining farms have been asked to disclose themselves along with their records and other paperwork in Kazakhstan by March 19.