Kazakh crypto miners plead with President to cut energy prices

October 3, 2023 Coin Telegraph

Asia

Eight major cryptocurrency mining operators signed an open letter to the President of Kazakhstan, Kassym-Jomart Tokayev.

In Kazakhstan, the world’s third-largest market in terms of Bitcoin mining hash rate, the local crypto-mining operators are complaining about the high energy prices to the national leader.

According to the local media, eight major cryptocurrency mining operators signed an open letter to the President of Kazakhstan, Kassym-Jomart Tokayev. This list includes BCD Company, TT TECH Limited, KZ Systems, AI Solutions, Green Power Solution Ltd., VerCom, and KINUR INVEST.

The letter states that the Kazakh crypto-mining industry is in a “very distressful situation” because of high energy prices for the miners. According to 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 that the situation with prices derails the government’s efforts to regulate the crypto industry in general and mining in particular. According to the letter, the problem is a consequence of the decision to raise taxes on energy for crypto miners. Because of the taxes they levy, the country has already lost its position among such crypto mining leaders as the United States, Russia, and China, and the industry stands on the brink of extinction, the letter claims:

“If the government does not take urgent measures, the digital mining industry in the Republic of Kazakhstan will cease to exist.”

The country introduced taxes on digital mining on Jan. 1, 2022, based on electricity consumption by mining entities. The law emerged amid growing national frustration with crypto miners’ undertaxed usage of the national power grid.

Even at the highest mark, 1 kWh of taxed electricity in Kazakhstan costs miners around $0.067, significantly lower than the average of $0.12 per kWh before any taxes in the United States. According to the data from the Kazakh government, it received only around $7 million (3.07 billion tenges) in tax payments from crypto mining entities in 2022.

Kazakhstan establishes regulatory agency to implement CBDC

September 18, 2023 Coin Telegraph

CBDC

The National Payment Corporation will be responsible for the development of “digital financial infrastructure,” including the implementation of the digital tenge.

The National Bank of Kazakhstan (NBK) has established a separate entity to lead the development and implementation of the country’s central bank digital currency (CBDC), the digital tenge.

According to an official statement on Sept. 15, the National Payment Corporation (NPC) is a reorganization of the Kazakhstan Center for Interbank Settlements. The new body will oversee the national payment system, including interbank clearing services, money transfers and digital identification.

The NPC will also be responsible for the development of “digital financial infrastructure,” including the implementation of the digital tenge.

Development of the digital tenge started in February 2023, with a launch deadline set for 2025. Back then, NBK deputy governor Berik Sholpankupov explained the bank’s vision of a “collaboration between traditional finance and DeFi” that could increase financial inclusion and support international trade.

At this point, the CBDC pilot in Kazakhstan is in a pilot phase using a controlled environment, real consumers, and merchants. One of the principal partners for the project is the world’s largest crypto exchange, Binance. The company supports the pilot with its technical solution, BNB chain.

In June, Binance announced the launch of a regulated digital asset platform in Kazakhstan in partnership with the local Freedom Finance Bank, allowing users to transfer fiat funds to their accounts on the platform.

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Binance launches regulated platform in Kazakhstan amid troubles in the West`

June 21, 2023 Coin Telegraph

Asia

Amid growing regulatory uncertainty in the West several crypto platforms have shifted their focus toward the Asia Pacific region.

Global cryptocurrency exchange Binance announced the launch of a regulated digital asset platform in Kazakhstan amid growing regulatory troubles in the West. The launch of the new platform was announced at a press event on June 20, 2023, in the presence of representatives of Kazakhstan’s banking industry, and Binance Kazakhstan's leadership.

The cryptocurrency exchange obtained an in-principle approval to operate in Kazakhstan in August and a permanent license to offer a digital asset platform and provide custodial services at the Astana International Financial Center (AIFC) in the country from the AIFC Financial Services Authority in October last year.

The new platform will offer a slew of crypto and fiat-focused services for Kazakhstani users including exchange and conversion services, deposit and withdrawal of fiat, and custody of crypto assets.

The banking services will be offered by Kazakhstan’s Freedom Finance Bank bank which would allow the new digital asset exchange users to transfer fiat funds to their accounts on the platform. There are two fiat channels available to deposit and withdrawals at present namely bank cards and bank transfers via Freedom Finance Bank.

The latest move for the leading crypto exchange by trading volume comes amid growing regulatory troubles in the United States and several European countries. Binance is currently embroiled in a U.S. Securities and Exchange Commission (SEC) lawsuit, as well as, a lawsuit from the Commodity Futures Trading Commission (CFTC).

Apart from its troubles in the U.S., the crypto exchange is also facing regulatory pushback from several European countries. One report indicated that the exchange was under investigation in France since early 2022 on “aggravated money laundering” charges. The exchange had to exit the Dutch market after failing to secure a virtual asset service provider license from regulators in the Netherlands. The crypto exchange also applied to wind down its services in the United Kingdom and Cyprus.

Binance maintained its exit from several European countries over the past few weeks was to focus on becoming compliant with the European Union-approved Markets in Crypto Assets (MiCA) regulations. However, reports suggest that European regulators are working with SEC on the Binance investigation.

Binance is not the only global crypto exchange eyeing the Asian market amid growing regulatory uncertainty in the United States and Europe. Gemini announced its plans to focus on the Asia Pacific region with an increase of staff at the crypto exchange’s Singapore division and establish an engineering division in India. With the rise of Hong Kong as a growing crypto hub, many crypto platforms are also assessing their plans to enter the country with legislators in the nation already inviting the likes of Coinbase to set up their office.

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Bybit gets pre-approval in Kazakhstan as crypto custody service provider

May 29, 2023 Coin Telegraph

Coin Telegraph

The cryptocurrency exchange received “in-principle” approval to operate in Kazakhstan at the Astana International Financial Centre.

Cryptocurrency exchange Bybit continues the expansion of its operations after receiving “in-principle” approval from regulators in Kazakhstan.

On May 29, the exchange announced its pre-approval from Kazakhstan’s Astana Financial Services Authority (AFSA) to operate as a digital asset trading facility and custody services provider at the Astana International Financial Centre (AIFC).

Ben Zhou, co-founder and CEO of Bybit, said he believes in the “promising potential” of the Commonwealth of Independent States (CIS) as a region for growth in the crypto industry.

Zhou also stressed Bybit’s commitment to compliance with local regulations. This comes after Bybit was recently flagged by regulators in Japan for operating without registration.

“It has always been our primary objective to operate our business in compliance with relevant rules and regulations."

Under the “in-principle” approval granted to Bybit, the company is subject to pre-conditions that will lead to permanent authorization to commence servicing locals after the application process is fully completed.

Over the last few months, Bybit has been in the process of expanding its service offerings. On May 2, it announced it would begin offering users crypto lending services.

In March, the company collaborated with Mastercard to offer a new debit card for cryptocurrency payments.

The latest move to offer services in Kazakhstan comes as the country has steadily developed itself as a regional hub for crypto, mining and blockchain.

In February, local officials announced a new mandate that 75% of revenue from crypto mining must be sold via a crypto exchange to crack down on tax evasion. A few months later, Kazakhstan revealed it collected around $7 million in crypto taxes in 2022.

Kazakhstan is currently in the pilot phase of its development of a central bank digital currency.

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Russia May Take Up 18% of Bitcoin Hashrate in Next Big Migration of Crypto Miners, Experts Say

May 8, 2023 Bitcoin.com

Kazakhstan collected $7M in crypto mining taxes in 2022

May 6, 2023 Coin Telegraph

Kazakhstan collected M in crypto mining taxes in 2022

Bitcoin mining

Crypto miners paid millions of dollars in energy fees last year following the regulation of the fiscal burden of mining activities.

The government of Kazakhstan has received 3.07 billion tenge (approximately $7 million) in tax payments from crypto mining entities in 2022, following the implementation of an amended law regulating the fiscal burden of mining cryptocurrencies, according to the local media reports.

Preliminary data from the government for 2023 shows that mining fees collected by April 27 totaled 240 million tenge - worth over $541,000 at the time of writing. The figures are much lower than the 652 million tenge (~$1.5 million) in fees paid in the first quarter of 2022.

Kazakhstan ranks among the world's top Bitcoin mining hubs. As of January 2022, the Central Asian country contributed to 13.22% of the total Bitcoin hash rate, just behind the United States (37.84%) and China (21.11%), shows data from Cambridge Centre for Alternative Finance.

The country introduced taxes on digital mining on January 1, 2022, based on electricity consumption by mining entities. The law came into effect amid a growing national frustration with undertaxed usage of the national power grid by crypto miners, Cointelegraph reported. The amended legislation was also considered a legal path for further adoption amid tightening regulations around the world.

A wave of foreign mining operators relocated to Kazakhstan in 2021 during the last bull market, affecting already difficult relations between the country and miners. Some estimates indicate that more than 87,849 rigs have been brought to the territory by November 2021 following China's crackdown on mining activities.

Recently, the government announced plans to introduce new crypto regulations to curb tax fraud and unlawful business operations. One of the proposals calls for a government approval for secured digital assets issuers, while another would require miners to sell at least 75% of crypto earned via registered exchanges. The move is expected to reduce tax evasion.

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Kazakhstan