Kazakhstan orders crypto miners to register with authorities

Kazakhstan orders crypto miners to register with authorities

The Kazakh Digital Development ministry order codifies regulations of registering and reporting for cryptocurrency miners amidst energy shortage

By Shashank Bhardwaj

Image: Shutterstock

The government of Kazakhstan issued a ministerial order citing the rules for registration of cryptocurrency mining facilities and reporting of cryptocurrency mining activities in the country. Kazakh authorities state they want to clean up the mining industry and channel energy usage toward legal cryptocurrency mining in the wake of energy shortages. 

The regulations are a part of an amendment to an order issued by the Ministry of Digital Development, Innovation, and Aerospace Industry, in October 2020. The amendment was signed on April 29. The order requires crypto mining firms to submit documents related to business registration, their IP addresses, the location of the mining facility, and the number and type of mining rigs in the facility. 

The miners will also have to submit information concerning the personnel employed, the amount of energy the facility consumes or plans to consume, the planned investments, a copy of the cargo customs declaration, or a document confirming that the mining equipment has been legally obtained, technical conditions related to the electricity supply connection, and a confirmation that all persons involved are residents of Kazakhstan.

The required information has to be filed by miners 30 days before starting operations, and in case they cease operations, the same has to be communicated to the authorities within 10 days of ceasing operations. The existing miners need to file the information every quarter. 

The order is a first in the list of regulatory steps which will officially lay down rules for conducting mining business in the country. The industry is now awaiting the licensing and tax laws for cryptocurrencies. 

As of now, the order will be used to weed out mining facilities that don’t have proper licensing to reduce the excessive load on the country’s energy grid. Alan Dorjiyev, the president of Kazakhstan’s Association of Blockchain and Data Centers industry, says that this regulatory code is the first step ‘toward officially approving the supply of electricity to legal mining data centres.’

Kazakhstan saw an influx of mining activities after the Chinese crackdown on cryptocurrency mining in early 2021. However, the country has been facing energy shortages since then. The Kazakh authorities had also announced the closure of 106 cryptocurrency mining facilities and the seizure of 67,000 mining equipment costing $193 million in March.  

Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash