[2022-02-26] Kazakhstan ministry halts illegal crypto mining operations

[DaveF]

https://cointelegraph.com/news/kazakh-ministry-halts-illegal-crypto-mining-operations

The Ministry of Energy of the Republic of Kazakhstan announced that it had discovered and terminated 13 cryptocurrency mining operations. The government executed the shutdown as part of its efforts to regulate the Bitcoin (BTC) mining sector, which has grown increasingly popular in recent years.

As per the official statement, the miners were using a lot of energy, with a total power consumption of 202 megawatts. According to the Kazakh government, efforts to identify and disconnect mining farms from the electrical networks will continue. Following the discovery of illicit mining operations, authorized bodies will take operational and investigatory actions.

Several other articles out there about it. I really see it as a giant game of whack-a-mole (https://en.wikipedia.org/wiki/Whac-A-Mole) as big miners just shuffle equipment around. Also, I always wonder if it's all just BTC or a mix of other algos and GPUs.

It makes you wonder how much more it would cost to do it legitimately vs. hoping not to get caught. Do they do any risk / reward calculation based on anything or just start plugging things in and hope for the best. In addition to the miners themselves there is a lot of other manpower and such involved.

-Dave

[SFR10]

as big miners just shuffle equipment around.

Isn't this harder to achieve for large-scale miners as opposed to smaller ones?
^{- It'd be a costly process to do it multiple times, so perhaps it'd be better to just get a license or relocate to a better country.}

Also, I always wonder if it's all just BTC or a mix of other algos and GPUs.

They didn't include those details in their "official statement", but a couple of days after that, there was "another case" and this time they explicitly mentioned BTCitcoin ASIC miners:

• An illegal mining farm was revealed in Shymkent
  
  The Department of KMA in Shymkent has identified persons engaged in mining activities in violation of the laws of the Republic of Kazakhstan.
  
  During the search, 360 ASIC mining units engaged in the production of digital cryptocurrency "Bitcoin" were found and confiscated. "Mining farms" are installed in 3 containers.
  
  The investigation is underway.
  
  Other information is not disclosed in the interests of the investigation in accordance with the requirements of Article 201 of the Code of Criminal Procedure of the Republic of Kazakhstan.

It makes you wonder how much more it would cost to do it legitimately vs. hoping not to get caught.

Don't quote me on this one since I'm not entirely sure if they've approved the "proposal but probably around 335% more ^{[from $0.0023 per Kwh to $0.01]} + taxes".

[bbc.reporter]

@SFR10. Also, knowing how corrupt the government officials and regulators are in less developed countries, I reckon much of them can be bribed to let some illegal businesses continue with their operations. I am also quite certain the government of Kazakhstan did not catch all of them.

[DaveF]

@SFR10. Also, knowing how corrupt the government officials and regulators are in less developed countries, I reckon much of them can be bribed to let some illegal businesses continue with their operations. I am also quite certain the government of Kazakhstan did not catch all of them.

Corruption is universal. Thinking it's worse in less developed countries is a myth.
But it's obvious they will never get them all. Even with the total ban on mining in China you can still see a fair amount of hash coming from there.
It just becomes better hidden as they figure out what caused them to be found.

-Dave

[SFR10]

@SFR10. Also, knowing how corrupt the government officials and regulators are in less developed countries, I reckon much of them can be bribed to let some illegal businesses continue with their operations.

You have a point, but that doesn't mean it guarantees them to be on the safe side ^{[it's just a temporary fix and as soon as the government officials/inspectors change, they're back to square one]}.

i think crypto will be not illegal if crypto miner pay tax  just like the casino.

If the tax was just on the goods, it would've not been a big problem but with the proposal to increase the electricity rates by roughly 335% ^{[for miners]}, it'd no longer be a lucrative business for most miners in there.
^{BTW, I didn't even include in the equation all of the possible issues with acquiring licenses...}

[LeGaulois]

 

i think crypto will be not illegal if crypto miner pay tax   just like the casino. Mining operation always illegal in many country.  i also heard news in malaysia government destoy multiple asic miner.

(Just to give an idea: 200 megawatts is the equivalent of 1/4 of the production of a nuclear power plant; the oldest ones can provide 900MW. In a country where there are 10 or 20 millions citizen, it's a bit of a huge consumption)

It's not necessary to interpret this measure as an attempt to ban mining or the whole crypto industry.

The government executed the shutdown as part of its efforts to regulate the Bitcoin (BTC) mining sector

The government intends to end the illegal farms but wants to regulate the BTC mining. In reality, they are stopping those who practice what they consider to be (actually) an illegal activity until a law is created so that miners can act in a normal manner. I mean having a registered company, paying appropriate taxes, and other stuff

 25% is a huge amount, especially nowadays with the energy crisis that has been growing for months and where every saving counts
On this one, I agree with the government. You can mine, but the rules must be the same for everyone. I'm of course ok with people mining bitcoin but it shouldn't be unfair competition and parasitism

[bbc.reporter]

25% is a huge amount, especially nowadays with the energy crisis that has been growing for months and where every saving counts
On this one, I agree with the government. You can mine, but the rules must be the same for everyone. I'm of course ok with people mining bitcoin but it shouldn't be unfair competition and parasitism

I disagree. I think that it is necessary for the survival of the bitcoin network for many miners to be unfair and be parasites in an antagonistic environment. I reckon if all of these miners only follow the rules without question, it would create an environment where the government can manipulate and open the mining industry to suppression or maybe also prohibition.

Participating in any cryptocoin should be open for everyone whether it will be holding, doing transactions, mining or staking.

[dark1234]

the problem of mining until now has become a problem that has become homework but the government must also provide and support alternative energy for miners by facilitating access to purchasing renewable electrical energy operating equipment and providing education on how to make it ...
because basically the miners will consider it a difficult thing and make it difficult

[LeGaulois]

@dark1234

No, it's not a problem and it's been debunked for years. That's the media that try to make it a problem.
What do you mean by saying it's the government's job to provide access to clean energy? Why not twist the question: why should not it be the miners to invest in infrastructures for clean energy? People always want the butter and the money of the butter as we say in my country.

This says it's companies that invest, operate, and provide access to clean energies. If there is no infrastructure for clean energies for miners, it's the same for every industry. The mining niche is not the villain so they stop it

@bbc.reporter

If you disagree, consider it from another point of view. Let's say your business is about cars. You pay the electricity, pay the taxes, and other stuff. And you have another car company, doing the same business, but cheating the system does not pay taxes and so making more money than you.
Isn't it unfair for your business? It is...

If people keep cheating a system, it creates an environment, not welcome (for the state, as well as businesses and citizens) and ends with a ban.
What's better? A ban with the risk for some to go in justice court, or in jail, or everyone follows the same laws?

[Kakmakr]

Let's just see this in context with the bigger picture.... In 2021, China banned all cryptocurrency-related mining activities and Miners scrambled into crypto-friendly Kazakhstan. How many of these operations registered themselves to pay Taxes and/or to operate a business in a foreign country?

This influx of energy intensive mining operations has put pressure on their electricity network, according this this BBC article : https://www.bbc.com/news/av/technology-60148754

"Kazakhstan's crypto mining farms are mostly powered by aging coal plants, which are a headache for authorities as they seek to decarbonise the economy." - Source : https://www.reuters.com/technology/kazakhstans-bitcoin-paradise-may-be-losing-its-lustre-2022-01-14/

[dark1234]

@dark1234

No, it's not a problem and it's been debunked for years. That's the media that try to make it a problem.
What do you mean by saying it's the government's job to provide access to clean energy? Why not twist the question: why should not it be the miners to invest in infrastructures for clean energy? People always want the butter and the money of the butter as we say in my country.

because the Government is closing as part of its efforts to regulate the Bitcoin (BTC) mining sector and in fact for miners who are individuals who are not industrial, it is very difficult to buy, import and make environmentally friendly power plants such as using solar panels that will supply electricity to be stable and if this is allowed they will continue to cook the butter with the available electricity because not all home miners want to eat bread and butter greedily

@dark1234

This says it's companies that invest, operate, and provide access to clean energies. If there is no infrastructure for clean energies for miners, it's the same for every industry. The mining niche is not the villain so they stop it

For bitcoin mining industry companies and others, I appreciate the government of the Ministry of Energy of the Republic of Kazakhstan to close it if it no longer uses renewable energy because many companies have developed it and use renewable energy and it is good to see developments about energy in this postDebunking the "Bitcoin is an environmental disaster" argument