Crypto Miners Drained Enough Power to Light up a City — Kazakhstan Cracks Down
Authorities in Kazakhstan have uncovered a scheme involving electricity companies illegally supplying power to cryptocurrency miners.
Violations of Digital Mining Laws
Authorities in Kazakhstan recently busted electricity companies accused of illegally supplying power to cryptocurrency miners. According to a statement, the Department of Financial Monitoring (DFM) for the East Kazakhstan region, along with the National Security Committee (NSC), uncovered an illegal sale of electricity amounting to approximately $16.5 million (9 billion tenge).
Under the Digital Assets, Informatization, and Amendments to Certain Legislative Acts (No. 194-VII), digital miners must purchase electricity exclusively through a single state-run platform, specifically the Ministry of Energy’s platform. Yet, as the statement notes, a number of energy supply companies had, for two consecutive years, illegally provided electricity intended for the public and strategically important enterprises to mining companies.
Furthermore, crypto miners are only allowed to buy electricity from the national grid when there is a documented surplus of power available. This is intended to prevent miners from consuming electricity intended for the general public and essential services.
However, Kazakh authorities contend that the total volume of misappropriated electricity exceeds 50 megawatt-hours — enough to power a city of 50,000 to 70,000 people.
“With the criminal proceeds, the organizer purchased two apartments and four cars in the capital. These assets have been frozen by court order for potential confiscation,” the Kazakh authorities stated.
Kazakhstan’s once-welcoming environment for cryptocurrency miners has deteriorated significantly, prompting a growing miner exodus. This shifting landscape of regulatory and operational uncertainty has now led to the departure of BTC miner Canaan, which has become the latest company to exit the Central Asian nation.
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