Local crypto miners in Kazakhstan are complaining about high electricity costs to the country’s president.
According to local media, eight prominent cryptocurrency mining operators signed an open letter to President Kassym-Jomart Tokayev. This list includes BCD Company, TT TECH Limited, KZ Systems, AI Solutions, Green Power Solution, VerCom, and Kinur Invest.
The letter states that the Kazakh cryptocurrency mining industry is in a “very distressful situation” due to expensive energy costs for miners. As stated in 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 the current pricing situation undermines the government’s efforts to regulate the crypto industry and mining. According to the letter, the issue results from the decision to increase energy taxation for cryptocurrency miners.
Due to the taxes, the country has already lost its position among crypto mining leaders such as the United States, Russia, and China, and the industry is on the verge of extinction. The letter asserts:
“If the government does not take urgent measures, the digital mining industry in the Republic of Kazakhstan will cease to exist.”
On January 1, 2022, the country implemented digital mining duties based on the electricity consumption of mining entities. The law was enacted in response to rising national ire over crypto miners’ undertaxed use of the national power grid.
Even at the highest rate, 1 kilowatt-hour (kWh) of taxed electricity in Kazakhstan costs miners approximately $0.067, substantially less than the average cost of $0.12 per kWh in the United States before taxes.
According to government data, the Kazakh government received roughly 3.07 billion tenges ($7 million) in tax payments from crypto-mining entities in 2022.
