The Kazakhstan government has put in place new reporting requirements for cryptocurrency mining operators with a watchful eye on how the industry’s energy use affects the local power grid.
The order published by the country’s Minister of Digital Development earlier this week requires digital mining companies to provide full information 30 days before starting operations.
The electricity consumption and the “technical specifications” for the connection to the electrical network must be provided before starting operations. The amount and type of mining equipment used, the cargo customs declarations of said equipment and the investments planned for the next 12 months must also be included.
Kazakhstan was swamped by an influx of crypto miners after the Chinese government cracked down on the practice in mid-2021. The increased use of mining rigs in the country strained the energy supply forcing the Kazakh government to take action, cutting off power to the miners on occasion.
The new reporting requirements also state that miners must submit information about the legal entity conducting the operation, which must be a resident of the Republic of Kazakhstan, along with contact information, as well as IP and physical addresses used in their activities.
The same information must be updated and presented in a mandatory quarterly report, companies that close mining operations must report when they have done so.
The recent order is an update of an existing order from the Minister in October 2020 setting out rules for providing information on digital mining activities.
Related: “We are the number two crypto miner in the world and we see practically no financial return,” says Kazakhstan President Tokayev.
Proposals to raise energy prices and raise taxes on crypto miners were put forward in February, suggesting a 335% electricity price hike along with removing the value-added tax (VAT) exemption on cryptocurrencies. mining equipment and instead tax each individual piece.
Authorities in Kazakhstan have been attempting to root out illicit crypto mining operations in the country due to the burden they place on the power grid. In March, 106 illicit crypto mining operations were closed following raids by the Financial Supervision Agency that seized more than 67,000 pieces of equipment at the time.
The most recent update to the Cambridge Bitcoin Electricity Consumption Index (CBECI) in August 2021 shows that Kazakhstan was home to more than 18% of the world’s BTC hash rate, second only to the United States.