Kazakhstan Crypto-Miners Seek President’s Help as Energy Cost Rises

Kazakhstan’s crypto-miners are upset about high energy costs and have told the country’s president, Kassym-Jomart Tokayev, they need help. The country is a big player in Bitcoin mining, but miners are in trouble.

Eight big cryptocurrency mining companies, including BCD Company and TT TECH Limited, wrote a letter to the president. They say that the mining industry is suffering greatly because of the high prices they must pay for energy. The letter states:

“Right now, all the big industry players have stopped working and plan to end their business in Kazakhstan by year's end.” 

The bosses who signed the letter think that the issue with costs is messing up the government’s work to control the crypto industry and mining. They believe it's due to a decision to increase energy taxes for crypto miners. The letter claims that because of the taxes, Kazakhstan has fallen behind other big crypto mining countries like the USA and China. They warn:

“If the government doesn’t act fast, digital mining in Kazakhstan will disappear.” 

Taxes on digital mining, based on how much electricity miners use, started on Jan. 1, 2022. This new rule came because people in the country were unhappy with crypto miners using so much power and not paying enough tax. 

Even with the new taxes, 1 kilowatt hour (kWh) of electricity in Kazakhstan costs miners about $0.067, which is still less than the average cost of $0.12 per kWh in the USA before any taxes. Data shows that the Kazakh government has collected about 3.07 billion tenges ($7 million) in tax payments from crypto miners in 2022.