New reporting requirements have been laid out by Kazakhstan’s government for operators of cryptocurrency mining, which pays attention to how the industry’s energy usage affects the power grid locally. A recently issued order by the Kazakh Ministry of Digital Development codifies the country’s registration and reporting requirements for cryptocurrency miners.
To comply with the order, new miners and hosting centers must register company names, physical and IP addresses, and contact information of responsible parties 30 days or more before they begin operations. These reports also include estimates of power usage and investment requirements.
After China cracked down on crypto mining in mid-2021, Kazakhstan was flooded with influxes of miners. A surge in mining rigs in Kazakhstan forced the government of Kazakhstan to take action, cutting power to miners at times.
As part of this process, miners will also have to show proof of residency in Kazakhstan. Furthermore, the order calls for regular updates on this information from existing miners. Those crypto miners who wish to terminate their operation will also be required to report to bitcointalk.com that they have done so.
At the end of last year, amid energy shortages across Kazakhstan, the ministry started implementing these registration requirements. The ministry seized mining equipment that was not registered.
The government issued proposals in February to hike power prices and raise taxes on crypto miners, proposing a 335% increase in electricity prices as well as removing the VAT exemption from mining equipment and instead taxing each individual piece.
There is an effort being made by the Kazakh authorities to root out illegal crypto mining operations throughout the country because of the burden that these operations place on the power grid. The Financial Monitoring Agency shut down 106 illicit crypto mining operations in March, seizing over 67,000 pieces of equipment at the time following raids on 106 illicit crypto mining operations.
According to the most recent Cambridge Bitcoin Electricity Consumption Index (CBECI), Kazakhstan held 18% of the world’s Bitcoin hash rate in August 2021, which was second only to the United States. As a result of China’s clampdown on the crypto mining industry at the start of 2021 which, until that point, was by far the largest industry in the world, Kazakhstan saw a rush of miners rushing into the country.
