Kazakh crypto miners plead with president to cut energy prices

Local crypto mining operators in Kazakhstan, the world's third largest market in terms of Bitcoin mining hash rate, are complaining about high energy prices to the country's president.

According According to local media, eight major cryptocurrency mining operators signed an open letter to President Kassym-Jomart Tokayev. The list includes BCD Company, TT TECH Limited, KZ Systems, AI Solutions, Green Power Solution, VerCom and Kinur Invest.

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The letter states that the Kazakh crypto mining industry is in a "very distressing situation" due to high energy prices for miners. According to the text:

"As of today, all major industry players have suspended their activities and plan to completely cease their business in the Republic of Kazakhstan before the end of the year."

The executives who signed the letter believe that the price situation derails the government's efforts to regulate the crypto industry in general and mining in particular. According to the letter, the problem is a consequence of the decision to increase energy taxes for crypto miners. Due to taxes, the country has already lost its position among crypto mining leaders such as the United States, Russia and China, and the industry is on the brink of extinction. The letter states:

"If the government does not take urgent measures, the digital mining industry in the Republic of Kazakhstan will cease to exist."

The country introduced taxes on digital mining on January 1, 2022, based on the electricity consumption of the mining entities. The law came amid growing national frustration with crypto miners. Underestimated use of the national electrical grid..

Even at the highest level, 1 kilowatt hour (kWh) of taxed electricity in Kazakhstan costs miners around $0.067, which is significant. lower That averages $0.12 per kWh before taxes in the United States. According to data from the Kazakh government, received about 3.07 billion tenge ($7 million) in tax payments from crypto-mining entities in 2022.