Crypto mining companies in Kazakhstan have moved out 30% of their mining equipment elsewhere.

Crypto mining facilities operating in Kazakhstan have already relocated around 30% of their mining equipment elsewhere. The President of the National Association of Blockchain and Data Center Industry of Kazakhstan, Alan Dorjiyev, told Forklog about the migration. The executive noted that miners had been influenced by the persisting issues with energy supply and an expected tax increase.

 

Increased tax rates and higher energy costs resulting in miners fleeing Kazakhstan. 

The National Association of Blockchain and Data Center Industry represents major companies involved in the extraction of digital currencies accounting for 70% of Kazakhstan’s crypto mining sector. The report quotes legislative documents indicating that Kazakhstan’s parliament is preparing to impose on miners a tax of 10 tenge (approx. $0.02) per kilowatt-hour (kWh) of electricity generated from domestic energy resources and 5 tenge per kWh for imported electrical energy.

If lawmakers adopt the proposed changes, the levy for electricity produced from natural gas and renewable sources, excluding hydropower, will be 3 tenge per kWh. Last year, authorities in Nur-Sultan introduced a surcharge of 1 tenge ($0.0023 at the time) per kWh of electricity used to mint cryptocurrencies.

 

Kazakhstan became a crypto mining hotspot after China’s crypto miner exodus. 

Kazakhstan became a mining hotspot following China’s decision to launch a nationwide crackdown on the industry in May, largely due to its capped electricity rates. The country initially welcomed mining companies, but since then, their energy-intensive operations have been blamed for a growing power deficit. As reported earlier, to deal with the shortages, the government increased electricity imports from the Russian Federation and shut down legal mining farms amid winter blackouts.