Kazakhstan Orders Crypto Miners to Register With Authorities

The government of Kazakhstan is requiring crypto miners to register their operations with authorities, according to a ministerial order published on Wednesday.

All miners will have to submit business registration data, along with information about personnel, the power they consume or plan to consume, IP addresses used, their planned investments, the location of the mine, a copy of the cargo customs declaration or a document confirming that they obtained the equipment legally, technical conditions for connection to the electricity supply and confirmation that persons involved are residents of Kazakhstan, among other documents, according to the order.

New miners have to file the information 30 days before starting operations, and any mines that close down will have to inform authorities within 10 days of ceasing operations. Existing miners have to file the required information every quarter.

The regulations come as an amendment to an order from the Ministry of Digital Development, Innovation and Aerospace Industry from October 2020. The order was signed on April 29.

Alan Dorjiyev, president of Kazakhstan's Association of Blockchain and Data Centers Industry, told CoinDesk that this is the first step "towards officially approving the supply of electricity to legal mining data centers." The national grid operator cut off power to mines in January.

Existing miners will also have to inform authorities about the number and type of mining rigs used, the order said.

Kazakhstan has been struggling with energy shortages, in part due to the influx of crypto miners to the energy-rich Central Asian state. Authorities have been trying to root out mining operations that do not have proper licensing to reduce the load on the country's energy grid. In March, they announced the closure of 106 mines, seizing 67,000 machines worth $193 million.

This is the "first step of regulations," which sets out official rules for how to conduct mining business in Kazakhstan, Didar Bekbauov, co-founder of local miner Xive.io, told CoinDesk. The industry is now waiting for licensing and tax laws, he said.

Read more: Kazakhstan President Calls for Tax Increase on Crypto Mining: Report