In recent news, the Kazakhstani government has raised $1.5M (652M Kazakhstani tenges) in Q1 2022. This revenue is from the fees it imposed on cryptocurrency miners in 2022.
Despite the opposition to a tax on crypto mining in April, the country has made some revenue. The report states, “The fee depends on the amount of power the companies consume.”
The three regions that produced the revenue are Nur-Sultan (277.3M tenges), Aktobe (48.9M tenges), and West Kazakhstan (143.1M tenges).
Furthermore, it is worthy to note that these funds form part of the national budget. Therefore, regions housing the miners may differ from those the revenue is allocated to.
In January, Murat Zhurebekov, vice-minister of power, decided to capture “grey miners.” The grey miners are those that refused to follow the power restrictions of the state.
Hence, the government implemented a service charge of $0.0023 (1 tenge) per kWh. Most companies complied since they saw it as an opportunity to enter the “white list.”
Crypto Miners Exit To Friendlier Countries
Initially, most companies tried to comply with the strict regulations of the state. Unfortunately, they have had enough and are moving the operation to other states. In December, Bitfufu had to close down its stations, and other companies followed suit.
Head of Luxor Tech, Alex Brammer, said that;
“We have been expecting something similar to what happened in China after the ban. Then, our phones kept ringing as calls came from regulators and other individuals.”
Crypto Mining Is Not Responsible For Electricity Problem
After the China ban in 2021, various companies had no place to migrate. Fortunately, Kazakhstan opened its borders to over 87,849 mining computers looking for cheap power.
Along the line, it could no longer cope with the increased demand for power. This was because the country depends on coal-based electricity.
Subsequently, the state decided to cut off electricity supply to crypto miners. In addition, it began to source more power supply from an energy firm in Moscow.
A professor from Glasgow University, Luca Anceschi, told Financial Times that;
“Kazakhstan has to change its energy policy to accommodate the high usage. Meanwhile, the nation can get electricity supply from Russia but that won’t last long-term.”
Anceschi believes “unregistered miners” are not to blame for the high power consumption. The real issue is the problem of power transfer from North to South. Meanwhile, the operator of the country’s grid noted that maintenance is ongoing.