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Kazakhstan Strikes Back Against Illegal Mining, Seizes 13 Crypto Farms

Authorities in Kazakhstan have launched an investigation into illegal cryptocurrency mining operations as a result of ongoing power supply issues. The country’s energy ministry announced the closure of over a dozen facilities minting digital currencies in collaboration with law enforcement.

Kazakhstan’s government has shut down unlicensed cryptocurrency mining operations across the country.

The Committee for Atomic and Energy Supervision of Kazakhstan’s Ministry of Energy has conducted a number of inspections to identify illegal coin mining operations in the country, according to the department. The joint checks were also attended by members of the country’s law enforcement and other government agencies.

“As a result of the inspections over the last 5 days,” the ministry stated in a press release, “mobile groups have identified and stopped 13 mining farms with a total consumption of 202 MW.” The facilities that have been closed down are spread across the Central Asian country.

Authorities discovered mining facilities with a total capacity of more than 31 MW in the Karaganda region, and another 22 MW of mining equipment in the Pavlodar region. They also disconnected hardware in the Turkistan region – 3.28 MW, Akmola region – 1.03 MW, Kostanay region – 0.82 MW, the capital Nur-Sultan – 1.8 MW, Almaty – 3.5 MW, and Shymkent – 4 MW.

The ministry also revealed that some miners have imposed “self-restrictions” totaling 91 MW in West Kazakhstan and 44 MW in Karaganda. Inspectors will continue to detect and disconnect illegal crypto farms while also identifying authorized mining facilities, according to the announcement.

The announcement about the government checks comes after President Kassym-Jomart Tokayev directed authorities to account for all coin minting enterprises in the country and verify their tax, customs, and technical documents earlier in February. He delegated the task to the Financial Monitoring Agency, which is expected to report back to the executive branch by mid-March.

Following China’s crackdown on the industry, Kazakhstan became a magnet for crypto miners due to its capped electricity rates. They were initially welcomed, but their energy-intensive production was later blamed for the growing power deficit. Due to winter blackouts, the country had to increase its electricity imports from Russia and recently shut down legal mining farms.

Protests over rising energy costs, particularly fuel prices, erupted in the first days of the year, putting Tokayev’s rule in jeopardy. To quell the unrest, his administration temporarily closed banks and restricted internet access, which had an impact on mining and the global bitcoin hashrate. Political unrest and power outages have already compelled some mining companies to seek more stable conditions elsewhere.

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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