Kazakhstan authorities are identifying and disrupting illegal cryptographic mining facilities, which are causing the country’s power crisis and also posing a threat to economic security. The Kazakhstan Financial Monitoring Agency carried out attacks on more than 100 unregistered cryptographic mining sites, stopping or terminating their operations once and for all. According to government guidelines, all crypto mining companies wishing to continue working in the Central Asian country must submit their papers by March 19th.
“In total, the Financial Monitoring Agency registered 25 criminal cases, confiscating more than 67,000 KZT (about 1,478 million) of the equipment worth about KZT 100 billion,” the government said in a statement.
Kazakhstan law enforcement agencies have seized mining equipment from the attacked facilities to prevent recirculation.
Affiliates of well-known activists in the Pavlodar region, Bolat Nazarbayev and Alexander Klebanov, allegedly exploited illegal mining centers.
Kairat Sharipbayev, the former chairman of KazTransGas in the Aktobe region, has also been appointed by the Kazakh government in connection with the ill-fated businessman Erlan Nigmatullin of the Karaganda region for illegal exploitation of cryptographic mining centers.
The country’s daily electricity consumption has fallen by 600 megawatts per hour since the authorities began, the government has complained.
Another reason that Kazakhstan has focused on thwarting illegal cryptographic mining is to ensure that hidden cryptocurrency assets are not exploited by malicious entities that threaten the nation’s economic stability.
“It should be noted that the lack of proper regulation of mining and the circulation of digital assets poses a significant threat to the financial system and the well-being of its citizens. Cryptocurrency can be a tool for financing terrorism, buying weapons and drugs, ”the authorities said in a statement.
Leading Kazakhstan government agencies are currently developing systematic solutions to regulate the cryptography sector.
Last year, Kazakhstan became the second largest mining center in the world, after the United States, according to the Cambridge Center for Alternative Finance. The development was seen by major Chinese centers last September following a decline in cryptocurrency mining activity.
Earlier last month, Kazakh President Kassym-Jomart Tokayev ordered authorities to increase the tax on electricity for cryptographic mining equipment.