In Kazakhstan, the world's third largest market in terms of Bitcoin mining hash rate, local crypto mining operators are complaining to national leaders about high energy prices.
According to local media, eight major cryptocurrency mining operators signed an open letter to Kazakh President Kassym-Jomart Tokayev. This list includes BCD Company, TT TECH Limited, KZ Systems, AI Solutions, Green Power Solution Ltd., VerCom and KINUR INVEST.
The letter states that the Kazakh crypto mining industry is in a "very difficult situation" due to high energy prices for miners. According to text:
"From today, all major industry players have ceased their activities and plan to completely cease their business in the Republic of Kazakhstan by the end of the year."
Executives who signed the letter believe the situation with prices is derailing government efforts to regulate the crypto industry in general and mining specifically. According to the letter, the issue is a result of the decision to increase energy taxes for crypto miners. Due to taxes, the country has already lost its position among crypto mining leaders such as the US, Russia and China, and the industry is on the verge of extinction, the letter claims:
"Unless the government takes urgent measures, the digital mining industry in the Republic of Kazakhstan will cease to exist."
The country implemented the law on January 1, 2022, which imposes a tax on digital mining on electricity consumed by mining organizations. This law emerged amid growing national frustration with crypto miners' untaxed use of the national energy grid.
Even at the highest level, 1 kWh of electricity taxed in Kazakhstan costs miners about $0.067, significantly lower than the average value per kWh of $0.12 before taxes in the United States. According to data from the government of Kazakhstan, it received only about $7 million (3.07 billion tenge) in tax payments from crypto mining organizations in 2022.
According to local media, eight major cryptocurrency mining operators signed an open letter to Kazakh President Kassym-Jomart Tokayev. This list includes BCD Company, TT TECH Limited, KZ Systems, AI Solutions, Green Power Solution Ltd., VerCom and KINUR INVEST.
The letter states that the Kazakh crypto mining industry is in a "very difficult situation" due to high energy prices for miners. According to text:
"From today, all major industry players have ceased their activities and plan to completely cease their business in the Republic of Kazakhstan by the end of the year."
Executives who signed the letter believe the situation with prices is derailing government efforts to regulate the crypto industry in general and mining specifically. According to the letter, the issue is a result of the decision to increase energy taxes for crypto miners. Due to taxes, the country has already lost its position among crypto mining leaders such as the US, Russia and China, and the industry is on the verge of extinction, the letter claims:
"Unless the government takes urgent measures, the digital mining industry in the Republic of Kazakhstan will cease to exist."
The country implemented the law on January 1, 2022, which imposes a tax on digital mining on electricity consumed by mining organizations. This law emerged amid growing national frustration with crypto miners' untaxed use of the national energy grid.
Even at the highest level, 1 kWh of electricity taxed in Kazakhstan costs miners about $0.067, significantly lower than the average value per kWh of $0.12 before taxes in the United States. According to data from the government of Kazakhstan, it received only about $7 million (3.07 billion tenge) in tax payments from crypto mining organizations in 2022.