The Financial Supervisory Agency of the Republic of Kazakhstan reported today that 55 illegal mining farms “voluntarily stopped their operation” due to an enforcement campaign by the regulator, and the operations of another 51 entities “were cancelled”. The enforcement operation focused on illegal mining operations that compromised the nation's power grid. The Agency called for developing a clear regulatory approach to crypto mining in its statement.
According to the statement, not only did all the targeted operators freeze the mining process, but they also dismantled the rigs and removed them from "deployment sites."
The release mentioned a number of high-profile business figures who were allegedly linked to the illegal activity. They included a former president of the state gas company Qazaqgaz, a former head of the national police's drug crimes department and the 17th richest person in the country.
These operations were considered illegal because they had not informed regulators of their activity, had illegally connected to the network, or had evaded paying taxes and customs. Part of the energy used by the illegal operators should have been used for industrial production.
The agency seized more than 67,000 pieces of equipment worth about $190 million and opened 25 criminal cases. Reportedly, daily power consumption in the country was reduced by 600 MWh after the police raid.
Related: Kazakh Ministry Stops Illegal Crypto Mining Operations
The enforcement action comes as no surprise, as Kazakhstan has stepped up its efforts to reduce the stress load that illegal crypto mining has been putting on its network. In August 2021, the country hosted over 18% of the global BTC hash rateBut in February 2022, the nation's Ministry of Energy announced its strategy to identify and take non-compliant mining farms offline.
This is not to say that the country is considering some kind of comprehensive crackdown on crypto mining. There are clear signs that the government is working on a reasonable regulatory approach that would help you take advantage of the new opportunities. As the press release of the Financial Supervision Agency says, "considering these developments, the interdepartmental working group is working on systematic decisions to regulate the problematic issues."
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