Eight significant crypto mining businesses reportedly sent an open letter to the President.
The issue, the letter suggests, stems from policymakers’ choice to increase taxes.
Kazakhstan is the world’s third-largest market for Bitcoin mining hash rate, and local crypto-mining businesses have expressed concerns about high energy costs to the nation’s president. Moreover, as per the letter, they have suspended their activities.
Eight significant crypto mining businesses reportedly sent an open letter to President Kassym-Jomart Tokayev, as reported by local media. According to the letter, increased energy costs for miners have created a “very distressful situation” for the Kazakh crypto mining business.
According to the letter:
“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.”
Verge of Collapse
The company executives who signed the letter are of the opinion that the current pricing environment undermines the government’s attempts to regulate the cryptocurrency sector as a whole and mining in particular.
The issue, the letter suggests, stems from policymakers’ choice to increase taxes on electricity used by cryptocurrency miners. As a result of the taxation, the nation has fallen far behind other crypto mining powerhouses like the U.S, and the sector is on the verge of collapse.
On January 1, 2022, the nation instituted new taxes on digital mining depending on the amount of power used by mining operations. National concern with crypto miners’ undertaxed use of the electricity grid gave rise to the regulation.
Miners in Kazakhstan pay an average of $0.12 per kilowatt hour (kWh) before taxes, which is much cheaper than the average of $0.24 per kWh in the United States.
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