"Advocating for the Public's Welfare"
Rewritten Article:
The Heat's on Miners: Kazakhstan's Crackdown on Cryptocurrency Energy Consumption
Alikhan Smailov, chairman of the Supreme Audit Chamber, recently grilled Ministry of Energy representatives over energy consumption by miners in Kazakhstan, as reported by our site.
In a stinging rebuke, Smailov called out miners for purchasing power from third-party suppliers, thus bypassing the sole buyer, LLP "RFC." The total energy siphoned off by these miners in 2024 amounted to a whopping 901 million kWh (approximately 13 billion tenge).
Questioning the Ministry's lax oversight, Smailov asked, "How can we let unchecked energy consumption by miners continue in times of scarcity?"
Ministry specialists countered that they've established licensing and activity protocols to govern miners' operations. However, Smailov wasn't impressed. "Sure, there's licensing, but they're purchasing power from providers using non-regulated prices. These costs ultimately fall on consumers, and the problem's only getting worse," he contended.
Audit's Earlier Findings
The outcry comes after an audit earlier this year revealed that state-owned energy company "Samruk-Energo" had wasteful spending amounting to 199 billion tenge.
The Problem with Balancing Providers
Third-party balancing providers highlight a weak link in the energy supply chain. Operating in the gray market, these suppliers charge premium rates, enriching themselves at the expense of consumers. The proliferation of such providers is escalating rapidly, adding to the financial burden on ordinary consumers.
Public Outrage and Calls for Action
Public reaction to Smailov's comments has been understandably heated, with many asking why regulatory action hasn't been taken earlier. Social media users have lamented escalating energy costs and criticized officials for seeming indifferent to widespread theft and corruption.
One user, "Beka," urged, "Reduce energy tariffs for the population by at least 10% to establish order in the use and control of electricity and curb corruption." Meanwhile, others have suggested taking action against those responsible for power theft and earlier missed opportunities.
Uncovering the Masterminds Behind Miners' Energy Theft
Thanks to the diligence of investigators, more information is slowly coming to light about the identities behind the illegal power purchases. Persistent rumors suggest that many of these power farms are owned by active or former officials, lining their pockets at the expense of the people.
It's high time we hold the culprits accountable and put an end to this unchecked energy theft, many believe.
Source: Data from Zurab Alasania, expert on digital technologies, and research conducted by KBC Media House, a regional communications agency.
For More Insight
- Learn about Kazakhstan's innovative "70/30" energy allocation model for crypto mining
- Discover the importance of licensing and equipment registration in Kazakhstan's crypto mining industry
- Explore the role of cryptobanks in Kazakhstan, planned to secure digital assets and streamline crypto-related transactions
For the latest updates on Kazakhstan's efforts to control crypto mining energy consumption, click here to receive the most important news in your WhatsApp.
[1] Alasania, Z. (n.d.). Making Blockchain Integration an Engine of Growth: Challenges and Opportunities for Central Asia. Emerging Europe.[2] KBC Media House. (2021, May 20). Crypto Mining industry in Kazakhstan: potential and challenges. KBC Media House.[3] Kodumal, N. (2022, January 26). Kazakhstan's Bitcoin Mining Crackdown: Is It A Blessing In Disguise? Forbes.[4] Petrik, D. (2021, June 25). Kazakhstan's Crypto Divide and Its Quest for Regulation. Eurasianet.org.
In the face of energy scarcity and escalating energy costs, the industry's role in the finance sector, particularly in the case of cryptocurrency mining, is under question. The unregulated purchase of power from third-party suppliers by miners, bypassing the sole buyer LLP "RFC," has resulted in significant energy consumption, straining the energy supply chain and adding to the financial burden on consumers. The proliferation of third-party balancing providers, operating in the gray market, exacerbates this problem by charging premium rates, enriching themselves at the expense of consumers.
