Kazakhstan continues to grapple with financial losses caused by unauthorized cryptocurrency mining. Since early 2024, illegal mining operations have cost the country approximately 1.3 billion tenge, or over $2.3 million in lost revenue. These underground facilities often siphon electricity at levels comparable to that of a large city, severely impacting energy availability for legitimate businesses and infrastructure projects.
Criminal Investigations and Asset Seizures
The Financial Monitoring Agency (AFM) has launched 17 criminal investigations targeting illegal mining activities. Most of the unlicensed operations were discovered in Astana, Shymkent, and Kostanay. Authorities have confiscated $642,000 worth of digital assets linked to these cases. The AFM also reported that residents near these noisy mining farms have faced disruptions, raising concerns about environmental and social impacts.
Legal Mining Generates Millions in Tax Revenue
Despite the challenges posed by illegal operations, Kazakhstan’s regulated crypto mining sector has contributed significantly to the national budget. According to the State Revenue Committee, licensed miners have generated over 17 billion tenge (more than $31 million) in tax receipts. Legal mining requires proper licensing, verified equipment, energy contracts, and tax compliance. The AFM warns that violations can lead to criminal charges and threaten economic stability.
Kazakhstan’s Crypto Ambitions and Enforcement Drive
Kazakhstan aims to become a regional hub for digital assets. High-profile visits from Binance founder Changpeng Zhao and Telegram’s Pavel Durov underscore the country’s growing influence in the crypto space. Meanwhile, the AFM has intensified its crackdown on financial crimes, recently dismantling the RAKS exchange, a major crypto laundering platform, and seizing $10 million from a Ponzi scheme targeting investors across Central Asia.
Frequently Asked Questions (FAQs)
- What is the penalty for illegal crypto mining in Kazakhstan?
Unlicensed mining can lead to criminal prosecution, asset seizure, and fines, as outlined by the Financial Monitoring Agency.
- How much tax revenue has Kazakhstan earned from legal mining?
Licensed crypto mining has generated over $31 million in tax revenue since 2024.
- Where are most illegal mining farms located?
The majority have been found in Astana, Shymkent, and Kostanay.
