A Shadow Mining Farm Spotted in Kazakhstan: Is the Country Going to Follow China's Lead?

Authorities in the city of Karaganda in Kazakhstan have discovered and liquidated a shadow mining farm that was illegally consuming electricity. The increasing activity of shadow miners could lead the country to ban the industry, following China's example.

Power sector officials focused their attention on a company that was consuming a suspiciously large electricity volume. It was originally registered as a wood processing company. However, during the inspection, it was found that the facility was partly used for mining, according to local news agency Litre.

Forced to ban the industry

As CoinIdol, a world blockchain news outlet, previously reported, the increasing activity of miners has brought Kazakhstan to the brink of an energy crisis. Moreover, most of them operate in secret without paying properly for the energy they consume.

This has forced the government to come up with a plan to track down cryptocurrency miners and bring them out of hiding. Some local community representatives were concerned that Kazakhstan might follow China's path and crack down on the industry to protect its energy sector. 

However, Energy Minister Magzum Mirzagaliev assured that they would not ban the industry or hinder the work of legal mining farms, Tengrinews reports. But for the country to maintain its friendly attitude towards the industry, its representatives should adopt a friendly attitude towards the government. This means that they should be properly registered and pay for the electricity they use.

Create favourable conditions

Currently, the government is working on a framework to regulate cryptocurrency mining. Some restrictions have already been proposed, such as on electricity consumption. In addition, the Ministry of Energy has proposed mandatory registration and taxation of miners. The tax framework, which will impose a tax on revenue from mining, will come into effect in January 2022. 

On the other hand, President Kasym-Zhomart Tokarev stressed the importance of creating favourable conditions to encourage miners to work legally. Excessive restrictions, on the other hand, could lead them to go deeper into the shadows, as is currently the case.