Kazakhstan Cracks Down on $16.5M Illegal Electricity Scheme Linked to Crypto Miners

Kazakhstan’s Financial Monitoring Agency has uncovered a $16.5 million illegal electricity supply scheme tied to cryptocurrency mining. The operation had been active for two years, with several regional energy firms secretly providing power to unlicensed mining sites.

Officials say the companies bypassed official grid allocations and avoided government tariffs. Energy distribution records were allegedly falsified to hide the true consumption, allowing miners to operate without detection.

The scheme placed additional strain on the national grid, causing outages in some regions. Since China’s 2021 crackdown, Kazakhstan has become one of the largest Bitcoin mining hubs, but this growth has fueled tensions over energy demand and infrastructure capacity.

Raids were carried out at multiple sites, with mining equipment seized and bank accounts frozen. Company executives face charges including fraud and abuse of office.

Kazakhstan enforcement sweep: raids, seized rigs, frozen accounts after $16.5M power-diversion scheme ⚡️🚓

🔴 Rule: buy surplus power through official portal—violations triggered crackdown

Good for legit miners? 💬https://t.co/swds7V8ehD

— Financyze | Finance News (@financyze) August 12, 2025

Expert and Political Reactions

Industry analysts say the case highlights the ongoing struggle between mining profits and energy stability.

“This is a clear example of how poor oversight can damage both the power sector and the reputation of the mining industry,” said Dmitry Nefedov, a blockchain infrastructure consultant. “Kazakhstan still attracts miners with low energy costs, but such illegal setups invite tougher regulation.”

Energy Minister Almasadam Satkaliyev said no sector can operate outside the law and harm national infrastructure. Lawmakers, including Aigul Kuspan from the economic reform committee, have called for tighter penalties and better monitoring to ensure every kilowatt is accounted for.

Stricter Oversight Ahead

Kazakhstan introduced higher tariffs, licensing rules, and energy quotas for miners in 2022, but enforcement remains difficult in remote areas. Authorities say more investigations are underway and pledged to close loopholes that have allowed illegal mining operations to thrive.

The government aims to balance the economic benefits of mining with the need to protect energy security for homes and businesses, signaling that the crackdown is far from over.