Kazakh crypto miners plead with president to cut energy prices

Local crypto-mining operators in Kazakhstan — the world’s third-largest market in terms of Bitcoin mining hash rate — are complaining about high energy prices to the country’s president. 

According to local media, eight major cryptocurrency mining operators signed an open letter to President Kassym-Jomart Tokayev. The list includes BCD Company, TT TECH Limited, KZ Systems, AI Solutions, Green Power Solution, VerCom and Kinur Invest.

Related: Kazakhstan establishes regulatory agency to implement CBDC

The letter states that the Kazakh crypto mining industry is in a “very distressful situation” because of high energy prices for miners. According to the text:

“As of today, all major industry players have suspended their activities and plan to completely cease their business in the Republic of Kazakhstan by the end of the year.” 

The executives who signed the letter believe that the situation with prices derails the government’s efforts to regulate the crypto industry in general and mining in particular. According to the letter, the problem is a consequence of the decision to raise taxes on energy for crypto miners. Because of the taxes, the country has already lost its position among crypto mining leaders like the United States, Russia and China, and the industry stands on the brink of extinction. The letter claims:

“If the government does not take urgent measures, the digital mining industry in the Republic of Kazakhstan will cease to exist.” 

The country introduced taxes on digital mining on Jan. 1, 2022, based on electricity consumption by mining entities. The law emerged amid growing national frustration with crypto miners’ undertaxed usage of the national power grid. 

Even at the highest mark, 1 kilowatt hour (kWh) of taxed electricity in Kazakhstan costs miners around $0.067, significantly lower than the average of $0.12 per kWh before any taxes in the United States. According to the data from the Kazakh government, it received around 3.07 billion tenges ($7 million) in tax payments from crypto mining entities in 2022.

Source: Read Full Article