Miners begin leaving Kazakhstan amid power-supply problems

BitFuFu, a mining company, shut down the devices located in Kazakhstan due to power-supply problems in the country and began relocating equipment to the United States. Other industry players have decided on this step as well.

The main problem was the introduction by local authorities of power-supply rationing for miners due to an looming energy crisis, BitFuFu noted. Because of equipment downtime, the company decided to relocate it. In a conversation with CoinDesk representatives of the firm confirmed that the miners have already been shipped to the United States.

According to the Financial Times, the number of BitFuFu devices placed in Kazakhstan reached 180 000.

Earlier, mining firm Xive shut down a data center housing 2,500 devices in the southern part of Kazakhstan also due to power-supply constraints. As cofounder Didar Bekbau told CoinDesk, many industry players are looking for relocation sites.

“Obviously, mining in southern Kazakhstan is no longer possible,” he said.

According to Bekbau, many have already started moving equipment to Russia and the United States.

The Kazakh Blockchain Technology Association told ForkLog that one reason for Xive’s shutdown in the country is its geographic location:

“Indeed, the south of Kazakhstan is home to several large cities with high populations, which in turn demand a substantial share of the country’s electricity.”

Representatives of the association also noted that at present, due to electricity shortages in the country it is quite difficult to set up new mining farms.

Alan Dordzhiev, head of the National Association of Blockchain and Data-Center Industry of Kazakhstan, confirmed that many miners are leaving the country. This is especially true for farms located in the south:

“Some are experiencing power-supply outages and are deciding to move somewhere else. Historically, the south has been an energy-deficit region.”

As reported in 2021, many cryptocurrency mining companies relocated to Kazakhstan in response to the tightening rhetoric of Chinese authorities. As a result, the country became one of the leaders in compute power in the Bitcoin network.

In June, Kassym-Jomart Tokayev signed a law providing for the introduction of additional fee for mining.

In September authorities stated rising energy consumption and its possible deficit. In this regard, Energy Minister Magzum Mirzagaliev proposed to limit the energy consumption of mining data centers.

In November Kassym-Jomart Tokayev ordered to ensure urgent legislative regulation of mining to combat the “grey” miners. The authorities also proposed to spell out criteria for activities related to cryptocurrency mining.

According to the National Association of Blockchain and Data Center Industry, as of October legal players in the mining sector contributed no less than 98 billion tenge ($230 million) to the economy per year.

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