Kyrgyz authorities have discovered and shut down a large cryptocurrency mining farm in the north of the country. Law enforcement officials say the illegal minting facility has inflicted "colossal damage" to the country's power grid and that they are still trying to estimate the losses.
Underground Cryptocurrency Exploitation in Kyrgyzstan
The Central Asian region, including the Kyrgyz Republic, has lately become a hotspot for cryptocurrency mining. Companies involved in mining digital currencies have been attracted to their low energy rates amidst a Bell about the industry in China.
The influx of miners has been blamed for electricity shortages and some countries have been moving to mitigate a growing energy deficit. In early October, reports revealed that the Kyrgyzstan the government had high the electricity tariff for crypto mining companies, among other consumers, citing the energy-intensive nature of their operations. Lawmakers from neighboring Kazakhstan have proposed a similar measure.
The Bishkek authorities have also been going after clandestine cryptocurrency miners. In May, law enforcement officers attorney 2,000 mining devices from various facilities minting outlaw digital currency at various locations in the capital city and the Chuy region.
Recently, during a similar operation, the State Committee for National Security (GKNB) has arrested a large illegal mining farm in the city of Druzhba, Issyk-Ata region. Its agents have confiscated another 2,500 mining machines, a media report has revealed.
According to a press release issued by the department and cited by Sputnik Kyrgyzstan, the data center, which operated in a greenhouse, has been operated by foreign nationals. The GKNB further notes that its illegal activities have "caused colossal damage to Kyrgyzstan's power grids".
Investigators are now working to assess the losses to the state and establish whether the mining hardware has been legally imported into the country. The committee added that it is also trying to identify all the people involved in the company.
Kyrgyzstan has been taking steps to regulate its growing cryptocurrency mining sector. In August 2020, the Ministry of Economy presented a invoice introduce taxes for mining activities. The legislation proposes a 15% tax levy on the cost of electricity consumed to mint digital currencies. The law also requires mining companies to register with regulatory bodies in order to obtain permission to operate in the country.
Do you expect Kyrgyzstan to continue its crackdown on illegal crypto mining operations? Share your thoughts on the matter in the comment section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not an offer or direct solicitation of an offer to buy or sell, nor is it a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author are responsible, directly or indirectly, for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
