Kazakh Authorities Bust 202MW of Illegal Crypto Mines

Authorities in Kazakhstan shut down 13 illegal crypto mines – overwhelmingly bitcoin – that together had electricity capacity of 202 megawatts, and promised a continued crackdown on the industry.

Facing severe electricity shortages over the past few months, Kazakhstan has been trying to track down improperly licensed mines in order to reduce the load on the national grid. Legally operating mines were initially under power rationing starting last September and eventually had their power cut off by national grid operator Kazakhstan Electricity Grid Operating Co. (KEGOC) in January.

Employees of the Committee for Nuclear and Energy Supervision and the Ministry of Energy, along with police and other state body representatives, had conducted inspections in the past five days, according to a statement Monday from the energy ministry.

Energy minister Magzum Myrzagaliev said in November that illegal mines consume an estimated 340MW of electricity, compared with 600MW that then went to legal operations. Miners had flocked to Kazakhstan starting last May, when Chinese authorities announced a crackdown on the sector. By August, Kazakhstan accounted for 18% of computing power on the Bitcoin network, second only to the U.S., according to the Cambridge Bitcoin Electricity Consumption Index.

Among the biggest busts in last week's operation were 31.3MW in the Karaganda province, 22MW in Pavlodar, 3.28MW in Turkistan, 1.03MW in Akmola, and 1.03MW in the Kostanay region. The government's work to identify illegal mines will continue, according to the statement.

In addition to the outright shutdowns, Kazakhstan President Kassym-Jomart Tokayev proposed that taxes on crypto mining increase fivefold on Feb. 8. BitFuFu and BIT Mining are among the notable companies as miners big and small look to move operations overseas.