According to a recent report, Kazakhstan's government has established new reporting criteria for Kazakhstan crypto miners to understand better the impact of the industry's energy use on the country's power infrastructure. As part of the country's efforts to reduce power use, cryptocurrency mining businesses will be obliged to provide precise details about their activities.
In accordance with the regulation, which was released earlier this week by the country's Minister of Digital Development, digital mining enterprises are required to disclose full information 30 days before beginning operations. Before beginning operations, it is necessary to give information on energy usage and "technical standards" for connecting to the power grid. Additionally, the quantity and kind of mining equipment utilised, the customs cargo declarations for that equipment, and any planned investments for the following 12 months must all be included in the report.
Impact of Chinese Government’s Crackdown on Kazakhstan Crypto Miners
Following the Chinese government's crackdown on Kazakhstan crypto miners in mid-2021, Kazakhstan was inundated by an inflow of crypto miners. With the rising usage of mining rigs in Kazakhstan, the country's energy supply has been stressed, prompting the Kazakhstan government to take action by turning off the electricity to miners at several points.
According to the new reporting requirements, miners must also submit information about the legal entity that is carrying out the operation, which must be a resident of the Republic of Kazakhstan, as well as contact information as well as the physical and IP addresses that are being used in its activities, to the Kazakhstani government.
It will be necessary to update the information in a mandated quarterly report. Firms closing down mining activities will be required to notify when they have completed the process. The latest order is an amendment to an earlier order issued by the Minister in October 2020 that established regulations for the provision of information concerning digital mining operations in the public domain.
Kazakhstan – World’s 2nd Largest Crypto Mining Farm
Kazakhstan President Tokayev claims that his country is the world's second-largest crypto mining and that he receives no financial reward. Proposals to raise electricity prices and increase taxes on miners crypto were introduced in February. The proposals call for a 335 percent increase in electricity prices, the removal of the value-added tax (VAT) exemption on mining equipment, and a tax on each piece of mining equipment.
Kazakhstani officials have been seeking to shut down illegal crypto mining power consumption activities in the nation because of their strain on the country's electrical supply. According to the Financial Monitoring Agency, 106 illegal cryptocurrency mining companies were shut down in March due to searches. The agency confiscated more than 67,000 pieces of equipment at the time.
When the Cambridge Bitcoin Electricity Consumption Index (CBECI) was last updated in August 2021, Kazakhstan was home to more than 18 percent of its bitcoin hash rate, ranking it second only to the United States in terms of BTC hash rate.