As part of Kazakhstan’s efforts to reduce power use, cryptocurrency mining businesses will be obliged to provide detailed details about their activities.
Kazakhstan Introduces Stringent Rules For Crypto Miners
According to a recent report, the government of Kazakhstan has established new reporting criteria for crypto mining companies to understand the impact of the sector’s energy usage on the country’s power infrastructure.
The decree, which was announced at the beginning of the week by the nation’s Minister of Digital Development, requires digital mining enterprises to disclose complete information one month before they begin mining activities in the nation.
Before beginning operations, it is necessary to give information on energy usage as well as “technical standards” for connecting to the power grid. Additionally, the quantity and kind of mining machine utilized, the equipment’s cargo declarations by customs, and any investments for the following year must all be added to the report.
Following China’s crackdown on cryptocurrency mining last year, Kazakhstan was inundated by an inflow of cryptocurrency miners. The rising usage of mining machines in the nation caused the country’s power supply to become overstretched, prompting the state authorities to take action, including at times turning off the electricity to miners.
Crypto Miners To Provide Detailed Information To The Government
As stated by the latest reporting requirements, all miners must produce information on the company or individual that is performing the operation. Crypto miners will also submit a physical address, IP address, and contact details to the Kazakhstani government. Also, they have to be residing in Kazakhstan.
Also, firms are to update the information in a mandated quarterly report regularly. In contrast, firms who are closing down mining activities will be required to notify when they have completed the process.
The latest decision is an amendment to an earlier order issued by the country’s Minister in 2020 that established regulations for the provision of information concerning digital mining operations in the public domain.
In February, proposals to raise electricity prices and increase tax on cryptocurrency miners were introduced. The recommendations called for a 335% increase in the price of electricity, as well as the removal of the VAT exemption placed on mining machines and the imposition of a tax on every piece of mining machine.
Kazakhstani officials have been seeking to shut down illegal cryptocurrency mining activities in the nation because of the strain they create on its electrical supply. According to the FMA, 106 unlawful crypto mining companies were closed in March after searches by the agency resulted in the seizure of over 67k machines.
As of August 2021, the Cambridge Bitcoin Electricity Consumption Index (CBECI) revealed that Kazakhstan was home to more than 18% of the planet’s BTC hash rate, ranking it second only to the US.