Bitcoin Miners Forced to Comply with Stricter Rules in Kazakhstan

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Key facts:
  • The regulators request a series of documents from the company and the equipment to be used.

  • The miners could move to Uzbekistan where solar-powered mining has been licensed.

Bitcoin miners wishing to settle in Kazakhstan must comply with stricter procedures, now that the Ministry of Digital Development has made amendments to the order issued in October last year, for the registration and approval of digital mining in the territory.

The new order issued by the Minister of Digital Development of Kazakhstan, Baghdad Musin, expands registration and reporting requirements for Bitcoin miners and other cryptocurrencies before regulators.

Now, they are not only required to register, but they must also inform the authorities about the start of their operations in Kazakh territory, at least 30 days before starting their mining machines.

The document includes companies and individuals engaged in business related to the digital mining industry.

Both Bitcoin miners, as well as equipment or maintenance providers, are now required to present the name and contact information of the company, bank information and IP addresses when formalizing their registration with the regulatory body. .

They will also have to specify the energy needs required by mining facilitiesas well as planned investments and the number of employees they have.

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Bitcoin Miners Forced to Comply with Stricter Rules in Kazakhstan

Among the required documents, the regulator now asks for copies of customs declarations or other documents that prove they own the mining equipment they will use.

Bitcoin mining in Kazakhstan.
Kazakhstan became the country with the second highest overall computing power on the Bitcoin network last year, after the United States. Source: Reuters/YouTube.

Likewise, documents are requested confirming that the representatives of the companies will reside in Kazakhstan and information showing the location of the Bitcoin mining farm in the country.

Additionally, Bitcoin miners are required to supply technical details of the hardware they will connect to the electrical grid.

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Bitcoin Miners Forced to Comply with Stricter Rules in Kazakhstan

In that sense, all miners and service providers that are already operating are required to update their information with the government every three months. AND, Bitcoin mining companies that decide to close their facilities will have to notify the State within a period not exceeding 10 days after the cessation of its operations.

The new rules are issued a year after a good number of Bitcoin miners moved to Kazakhstan after being expelled from China, after this country banned digital mining and any activity related to cryptocurrencies.

After that, the government has been regulating cryptocurrency miningbut always alleging that this activity has caused an energy crisis in the country.

For that reason, regulators are targeting miners who are not authorized to operate in Kazakhstan, although permitted farms have also suffered power outages, as reported by CriptoNoticias.

Will Bitcoin miners continue to flee to other territories?

Kazakhstan, since last year, ranks second on the Bitcoin hashrate map, generating at least 18% of the global computing power that powers the grid. The first place is held by the United States with 35%.

However, in recent years, a greater concentration of miners has also been accompanied by greater restrictions on the activity by governments.

First it was China where Bitcoin mining was banned forcing miners to leave that country, and more recently Kazakhstan has tightened its rules, to the point that some large mining operations have been forced to leave the country..

The same is happening in Russia, a country that generates more than 11% of the computing power of the Bitcoin network, but where measures have also been tightening for miners, who are accused of high energy consumption.

Now, a neighboring country like Uzbekistan appears to be becoming more digital mining friendlynow that it is allowing it and freeing it from taxes, as long as the miners power their farms by installing solar panels.

No mining license is required, but mining companies must be registered by a newly formed Uzbek National Agency for Prospective Projects, according to a presidential decree.

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