Bitcoin Miners in Kazakhstan Suspend Operations Due to High Energy Costs - COINTURK NEWS
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Bitcoin Miners in Kazakhstan Suspend Operations Due to High Energy Costs

4:23 pm (60 days ago)
October 3, 2023

Miners in Kazakhstan, who are preferred by many due to electricity costs, have taken an interesting step. Miners in the country, which is the third largest market in terms of hash rate in Bitcoin mining, sent a letter to the country’s president about the high energy costs and conveyed their demands. In 2022, crypto miners in Kazakhstan paid approximately 3.07 billion tenges (7 million $) in taxes.

Mining Companies Are Suspending Operations

According to local news in Kazakhstan, eight major mining companies operating in the country sent a letter to President Kassym-Jomart Tokayev. The companies that signed the letter include BCD Company, TT TECH Limited, KZ Systems, AI Solutions, Green Power Solution, VerCom, and Kinur Invest.

The miners, who announced that they are going through a difficult process due to high electricity costs, recommended a solution for the crypto mining sector in Kazakhstan and stated the following:

“As of today, all major industry players have suspended their operations and plan to completely shut down their businesses in the Republic of Kazakhstan by the end of the year.”

Tax Law Increases Costs

According to executives who complain about the government’s efforts to regulate the crypto sector and especially mining activities, the main problem was the tax system designed for crypto miners. Due to these taxes, the country’s position among the leading countries in crypto mining has already been lost, and the industry in the country is on the verge of extinction. The allegations in the letter were expressed as follows:

“If the government does not take urgent measures, the existence of the crypto mining sector in the Republic of Kazakhstan will come to an end.”

The tax regulation mentioned in the letter came into effect on January 1, 2022. The tax law, based on electricity consumption of mining organizations, emerged after the country became an attractive region due to its electricity costs and disappointed many companies.

Despite the legal tax regulation, miners in the country are paying $0.067 for 1 kilowatt-hour (kWh) of electricity, which is the highest cost level. In the US, before any taxes, 1 kilowatt-hour of electricity costs an average of $0.12. According to the data of the Kazakhstan government, crypto mining organizations paid approximately 3.07 billion tenges (7 million $) in taxes in 2022.

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