Kazakhstan lawmakers pass new Bitcoin mining bills

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Lawmakers in the country have passed the Crypto Assets Bill “On Digital Assets of the Republic of Kazakhstan” and other laws focused on crypto mining. The Mjilis, or lower hours of the Parliament of Kazakhstan, approved the four bills.

Following the exodus of Chinese miners, Kazakhstan has become one of the favorite destinations due to cheap electricity. However, as cryptocurrency mining exploded, lawmakers proposed hostile measures against the industry.

Strict rules

Details of the five bills that introduce a new power purchasing regime for mining equipment, as well as updated licensing and taxation regimes, were shared by Didar Bekbauov, co-founder of Xive, a crypto-mining solutions platform.

Miners will now be required to buy only excess electricity from the public grid. Exclusive purchase of electricity through the operator of the electricity and electricity market of Kazakhstan [KOREM] the exchange can also be carried out by minors. However, not everyone will be able to make this purchase because the electricity would be sold as an auction, meaning the highest bids win.

The mining permit procedure is classified into two categories. The first will involve digital miners who have the appropriate infrastructure – data processing centers with the appropriate equipment, location and security requirements.

The second category concerns digital miners – equipment owners who rent cells in data processing centers and do not claim an energy quota.

Commenting on the bill, Ekaterina Smyshlyaeva, member of the Mjilis Committee on Economic Reform and Regional Development, said:

“The draft law, in addition to mandatory accreditation, introduces separate requirements for mining pools in terms of locating their server capacities in Kazakhstan and complying with information security regulations.”

Is Crypto Crackdown Inevitable?

New crypto taxes have also been introduced which include provisions for miners, mining pool commission, value added tax, and tax on crypto exchanges as business entities.

With the new rules approved, single miners and mining pools will face corporate income tax based on the value of the crypto-asset as well as commission rates for the pools. In addition to this, the Majilis is also seeking to enforce a general ban on the advertising of crypto transactions and design regulations specifically for “cryptocurrency securities”.

Additionally, individuals engaging in crypto transactions will also be subject to value added tax as well as corporate income tax on crypto exchanges.

The latest development comes more than a month after Mjilis’ bills were greenlit to establish proper rules in the national crypto sector. As such, crypto miners and mining pools will fall under the jurisdiction of the Ministry of Digital Development, Innovation and Aerospace Industry.

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