Seized Property Valued at 900 Million Due to Illegal Mining Activity in Astana's District
In a recent development, three residents of Astana have been sentenced for operating an illegal mining farm disguised as a center for processing engines. The court ordered the seizure of 143.2 million tenge in criminal proceeds and property worth over 900 million tenge, including two vehicles (a Toyota Camry and a Nissan Juke) and mining equipment.
The illegal mining operation, which was uncovered by authorities, consumed over 50 megawatt-hours (MWh) of power. This electricity diversion, equivalent to the electricity usage of a city of 50,000 to 70,000 people, caused significant losses estimated at around $16.5 million over two years. The electricity was siphoned from local populations and critical facilities through corrupt utility insiders.
Under Kazakh law, crypto mining farms are required to purchase electricity only from a state-run platform operated by the Ministry of Energy and are limited to acquiring no more than one MWh at a time. The unauthorized purchases and large-scale diversion by the miners violated these laws.
Authorities, including the Department of Financial Monitoring and National Security Committee, have been cracking down on such illegal mining operations. They have frozen assets, confiscated luxury properties and vehicles bought with illicit crypto profits, and launched criminal investigations. Mining companies and associated entities are facing penalties and shutdowns.
The crackdown fits into Kazakhstan's wider efforts to regulate crypto mining sustainably. The government aims to balance economic benefits with energy security and environmental sustainability. The regulatory framework includes licensing of operations and requirements for miners to sell most assets through official exchanges.
The trio of miners was found guilty under part 2 of the criminal article "Illegal Entrepreneurship" and fined. They illegally mined digital assets worth over 143 million tenge from 2022 to May 2024. The verdict has taken effect.
This case serves as a reminder of the strict energy usage limits and legal oversight that illegal crypto mining operations face in Kazakhstan. Violations involving unauthorized electricity consumption and theft can lead to severe penalties, including asset seizures and criminal investigations.
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