Kazakhstan’s Financial Monitoring Agency (AFM) and National Security Committee (KNB) have uncovered an illegal crypto mining scheme that siphoned more than $16 million worth of electricity to mining farms.
Kazakhstan Agencies Clamp Down On Illegal Crypto Mining
According to a statement released today, Kazakh financial and law enforcement authorities dismantled a large-scale operation in East Kazakhstan Oblast that illegally sold electricity to mining companies. The AFM and KNB said the stolen power could have supplied the needs of a small city in the region.
Notably, employees of local utility providers had been illegally selling electricity to mining companies over the past two years. This energy was originally intended for the local population, social facilities, and enterprises of strategic importance.
The crypto miners used over 50 megawatt-hours to mint digital coins during the period. The AFM noted that this level of energy consumption was comparable to that of a city with 50 to 70,000 residents.
The miners consumed more than 50 megawatt-hours (MWh) of power during this period. The AFM said that this was comparable to the energy usage of a city with 50,000 to 70,000 inhabitants.
Under Kazakhstan’s current laws, mining farms can purchase electricity only from a state-run platform operated by the Ministry of Energy. They are also limited to buying no more than one MWh at a time.
Authorities estimate that over nine billion Kazakhstani tenge (approximately $16.5 million) worth of power was illegally supplied to the mining operations. The AFM revealed:
The organizers used the criminal proceeds to purchase two apartments in the capital and four vehicles, which were seized with a court order for potential confiscation.
Following China’s blanket ban on all crypto-related activities – including Bitcoin (BTC) mining – Kazakhstan emerged as a major hub for mining. While initially welcoming the industry, the country later faced rolling blackouts and grid breakdowns, prompting the government to impose tighter regulations on the sector.
Crypto Mining In The Region
Kazakhstan’s crackdown on crypto mining firms illegally using power is not an isolated case. Across the region, illegal mining operations have drawn increasing scrutiny from multiple governments.
For instance, Russia recently warned that it will crack down hard on anyone mining digital assets without the necessary permissions. The country also recently introduced a national registry for cryptocurrency mining hardware.
Elsewhere, France’s far-right Rassemblement National party recently announced plans to repurpose unused nuclear power for BTC mining, signaling a different approach to the energy demands of the industry. At press time, BTC trades at $120,260, up 1.3% in the past 24 hours.
Featured image from Unsplash.com, charts from worldpopulationreview.com and TradingView.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
