According to the Prosecutor General of Tajikistan, Khabibullo Vokhidzoda, the damage from illegal cryptocurrency mining in the country in the first half of the year amounted to 3.52 million US dollars.
At a press conference, Vohidzoda noted that this damage was caused by the illegal use of electricity by miners, while electricity suppliers receive compensation from the state.
“There are individuals who import equipment for mining companies from abroad and illegally mine cryptocurrency,” Vohidzoda said, adding that four to five criminal cases have currently been opened for the use of mining equipment.
Vohidzoda’s statements followed a similar report from the Sughd regional prosecutor’s office, which is investigating seven cases in which 135 bombs were found in residential buildings, causing damages amounting to just over $30,000.
While cryptocurrency mining in Tajikistan has no clear legal basis, it comes amid widespread illegal and unpaid electricity use in the Central Asian country.
Since January, 190 criminal cases related to such use have been filed, involving 3,988 people and seeking $4.26 million in damages.
Tajikistan is not the only Central Asian country facing a growing cryptocurrency mining problem: Kazakh authorities recently shut down a cryptocurrency mining scheme using illegally obtained energy.
The Financial Monitoring Agency and the National Security Committee of Kazakhstan, as a result of joint work, found that employees of local energy companies supplied mining firms with more than 50 megawatt-hours (MWh) of electricity intended for domestic and commercial use over a two-year period.
This corresponds to the energy consumption of a city with a population of 50,000 to 70,000 people.
Kazakh authorities also said the stolen electricity was worth about $16.5 million and that the scheme’s mastermind used the proceeds to purchase two apartments and four cars, which are now subject to confiscation.
As in Tajikistan, cryptocurrency mining is not strictly illegal in Kazakhstan, but authorities are seeking to limit its impact on the country’s energy grid.
Recent changes in legislation have established that mining farms are only allowed to purchase electricity from the Ministry of Energy, and they cannot purchase more than 1 MWh or less.
The rules are aimed at curbing a sector that received a major boost after China banned cryptocurrency mining in 2021, while the combination of low costs and uneven enforcement in Central Asia makes the region attractive to miners.
“We have previously seen an increase in mining activity in Kazakhstan after China kicked out miners in 2021,” Digiconomist founder Alex de Vries told Decrypt . Given the country’s proximity to China and “favorable conditions” such as the rising price of Bitcoin , “these regions may be attractive to Chinese miners,” he added.
Not only Chinese miners, but also their Russian colleagues can develop the mining sector of Central Asia.
That’s according to Ari Redbord, director of global policy and government affairs at TRM Labs, who told Decrypt that sanctioned Russian actors have been exploiting elements of the Central Asian crypto ecosystem in recent years, particularly in Kyrgyzstan.
“Given the close connection between the region’s financial and cryptocurrency infrastructure, illicit mining activity in Kazakhstan or Tajikistan could involve the same cross-border networks, counterparties, and liquidation routes already used to evade sanctions,” he said.
China’s example may be instructive for countries like Kazakhstan and Tajikistan, as Alex de Vries noted that China still has a significant influence on Bitcoin mining even after a comprehensive ban was imposed.
“The Cambridge Mining Map shows that their share has fallen from almost 50% to 20%,” he explained. And while bans have a “strong impact,” he added, even with a comprehensive ban on mining, “it’s hard to eliminate it completely.”
As recent events in Tajikistan and Kazakhstan show, smaller-scale operations can continue to operate without adequate controls, particularly in places where oversight and enforcement are weak.
“Central Asia offers a combination of relatively low energy costs, limited regulatory oversight and, in some cases, an unclear legal framework for the extractive industry,” Redbord said. “These conditions create opportunities for illegal operators to engage in large-scale mining operations.
Source: cryptonews.net
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