- As of April 27th, the government has earned 240M tenge in mining fees this year alone.
- The Central Asian nation provided 13.22% of the overall Bitcoin hash rate.
Local media outlets indicate that in 2022 after a new rule was passed to regulate the financial burden of cryptocurrency mining, the government of Kazakhstan collected 3.07 billion tenge (about $7 million) in tax payments from crypto mining businesses.
As of April 27th, 2023, the government has earned 240 million tenge in mining fees this year alone, which is more than $541,000 at the current exchange rate. The numbers are much lower than the first quarter of 2022’s fees of 652 million tenge (about $1.5 million).
According to the Cambridge Centre for Alternative Finance, in January 2022, the Central Asian nation provided 13.22% of the overall Bitcoin hash rate, ranking it third behind the United States (37.84%) and China (21.11%).
Crackdown on Tax Evasion
On January 1, 2022, the nation instituted tariffs on digital mining depending on the amount of power used by mining operations. The regulation went into force as public anger rose over crypto miners’ undertaxed use of the national power infrastructure.
In 2021, during the last bull market, a large number of multinational mining operators migrated to Kazakhstan, further straining the already tense relationship between the government and the mining industry.
New crypto restrictions have just been published by the government in an effort to reduce tax evasion and illegal business practices. Among the suggestions is one that would force issuers of secured digital assets to get government clearance, while another would mandate that miners sell at least 75% of their cryptocurrency gains on regulated exchanges. The change is aimed at curbing tax avoidance.