BitFuFu is abandoning its mining rigs in Kazakhstan and buying new ones from Bitmain and setting them up in the U.S., after weeks of power rationing in the Central Asian country, BitFuFu told CoinDesk on Thursday.
- Kazakhstan has been facing severe electricity shortages, partly because of the influx of crypto miners in the country, but also because of pre-existing problems with its energy infrastructure. The national grid operator moved to ration electricity to crypto mines in September.
- In November, the Ministry of Energy assured the industry that the government won’t restrict electricity to legal mines. But the rationing didn’t stop. Last month, miner Xive shut down a 2,500-rig facility in Kazakhstan because of energy shortages. Industry sources estimate legal mines with 200 to 500 megawatts of power have been cut off from the grid.
- BitFuFu’s new machines have already arrived in the U.S., a company spokesperson told CoinDesk. The company previously told users that it was facing delays taking the machines through customs and transporting them to the mines because of the Thanksgiving holiday.
- BitFuFu users have been watching their investments sit idly as the platform’s Kazakhstan facilities are offline.
- One user told CoinDesk that BitFuFu’s machines have been completely offline for a little over one month, adding that he would leave the platform if it gave him his money back. Another said that disruptions started in mid-October and that they are worried, but not angry at the service. Users who spoke to CoinDesk refused to be named because their contracts with BitFuFu include anti-defamation clauses.
- The mining platform acknowledged the problem stemming from Kazakhstan’s electricity rationing in an Oct. 14 Telegram message, saying it would compensate users by extending their contract for as long as their machines are offline.
- According to the Financial Times estimates, BitFuFu has 80,000 rigs in Kazakhstan after moving there from China because of a government crackdown on crypto mining. A company spokesperson refused to comment on the estimate.
- The BitFuFu spokesperson told CoinDesk the company might try to sell its machines in Kazakhstan, but hasn’t reached a decision yet.
- BitFuFu is a platform that enables users to invest in mining without having to operate the facilities.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.