Crypto miners fleeing China’s latest mining-focused crypto crackdown may turn to a nearby nation in a bid to continue doing business – with Kazakhstan increasingly looking set to provide a new home for those looking to set up shop outside Mainland China.
Per Kaktus Media, the number of mining operations in the country is “increasing,” while mining “entrepreneurs are getting richer” – with the state happy to take a share of the profits.
Last year, Kazakhstan’s Economy Ministry announced that the nation would begin taxing miners at a rate of 15% in a bid to help it mitigate the economic fallout of the COVID-19 pandemic.
And the media outlet noted that according to Ministry of Digital Development figures, the crypto mining industry in Kazakhstan is now worth some USD 216m – USD 300m per year – although this only takes into account the revenues of large-scale industrial miners. With smaller-scale setups becoming more widespread, the real number could be higher – particularly if reports of Chinese mining operations relocation to the country are true.
Quoting token data and rating agency TokenInsight data, the media outlet reported that Kazakhstan is one of the world’s top five mining countries, with only China, the USA, and Russia boasting more mining revenue.
The nation’s government has fostered the mining sector and until 2019 was still talking about allowing miners to operate on a tax-free basis, spending some USD 200m on mining and crypto infrastructure-elated projects that have thus far seen 17 mega crypto farms become operational in Kazakhstan.
Also, last week, Cryptonews.com reported that the Chinese mining firm BIT Mining has formed a partnership with an unnamed Kazakhstan-based company. The duo will jointly invest in a crypto mining center to be built on Kazakh territory, with BIT Mining footing 80% of the expenses.
The media outlet quoted major crypto exchange Huobi as stating that its mining operations would now “focus on the expansion” of its “overseas presence” rather than the Mainland, while it also quoted Jiang Zhuoer, the founder of the BTC.TOP mining pool, as stating that he was thinking of moving his pool’s machines to North America and Central Asia. The BTC.TOP chief added:
“North America has the best security and political environment for mining, but the cost is high. Central Asia is close to the Xinjiang Uygur Autonomous Region.”
Xinjiang shares a large land border with Kazakhstan to the north and Kyrgyzstan to the northwest.
However, Kaktus Media reported that in Kyrgyzstan, a temporary block has been placed on mining after electricity shortages. Regardless, illegal mining ventures appear to be flourishing. The Kyrgyz State Committee for National Security has shuttered six large illegal mines operating in industrial facilities and has seized more than 2,000 pieces of mining equipment in recent months.