The ongoing saga on Kyrgyzstan’s battle on crypto mining took a new turn this week after 45 crypto miners had their power cut off.
The Central Asian country with a population of over 6 million people has become a popular location for global cryptocurrency mining farms because of its cheap energy prices. This is despite the fact that cryptocurrencies have been banned in Kyrgyzstan since July 2014. The national bank there made it illegal to use any cryptocurrency as a payment method. However, crypto mining activities and the use of blockchain technology are still legal.
In August, Kyrgyzstan, officially the Kyrgyz Republic, proposed a draft law to tax, crypto mining. The country’s Ministry of Economy submitted a draft law “On Amending the Tax Code” focused on introducing taxation to crypto mining activities.
Crypto Mining Big Business in the Kyrgyz Republic
It is estimated that there are approximately 80,000 cryptocurrency mining devices situated within the Kyrgyz Republic. Should the tax be implemented, the country could supposedly generate around $4.2 million in revenues. This would be considered significant for a country whose annual budget is around $1 billion.
In July, 28 Bitcoin mining companies based in Kyrgyzstan were shut down after being disconnected from the power supply network. The State Committee for Industry, Energy and Subsoil Use said that the 28 companies engaged in crypto mining were deprived of the power supply in order to conserve water in the Toktogul reservoir.
July also saw the Kyrgyz financial police liquidate a crypto mining farm in Bishkek due to the excessive amount of energy it was using. The mining farm was also found guilty of dealing in an illegal cryptocurrency.
The 45 crypto mining firms who had their power cut off, are believed to have consumed more energy, approximately 136 megawatts of electricity, than three local regions: Issyk-Kul, Talas and Naryn, put together.
