Kazakhstan has imposed new reporting requirements that seek to determine the energy consumption rate by crypto miners.
The order requires every crypto-miner in the country to provide detailed information about their operations 30 days before commencing operations.
Kazakhstan requests new information from miners
The new rules aim to determine how crypto mining affects the country’s energy grid. Digital mining businesses have to provide information such as technical specifications for their connection to the power grid.
They also need to include information about mining equipment and any investment within the next 12 months. The requirements also make it compulsory for mining companies to provide information about the legal entity in charge of the operation, its contact details, IP, and physical addresses used for mining. Such a legal entity must reside in Kazakhstan.
As part of the new reporting requirements, crypto miners will also have to submit quarterly reports where they update the initial information provided. In addition, companies that want to stop operating will also have to inform the government.
Kazakhstan’s anti-crypto mining policies
In recent months, Kazakhstan has changed its approach to dealing with crypto miners. The country had previously welcomed miners leaving China because of the new de-facto ban on crypto-related activities.
However, the impact of mining activities on its energy grid is leading Kazakhstan to rethink its strategy. The government has cut off miners’ access to power on occasion in recent months and begun increasing tariffs.
Crypto mining attracts tax
The Minister of National Economy stated that the government is planning to increase the taxes on crypto mining. Energy costs are currently ten times higher for miners, but it could become a lot costlier if the tax proposal should go through.
The proposal also includes removing the Value Added Tax exemption on mining equipment. This new approach attempts to regulate the mining industry and shut down illegal mining, which has become popular in the country.
According to the Financial Monitoring Agency, it shut down 106 illegal crypto mining operations in March, seizing 67,000 pieces of equipment. The country has the second-highest Bitcoin hash rate after the US.
There are speculations that the new policy change could force crypto miners to migrate to other countries like Uzbekistan, which is looking to attract miners that use solar energy by waiving income tax.