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Kazakhstan shuts down crypto mining operations till the end of February.

Data centres in Kazakhstan that mint cryptocurrencies were disconnected from the country's electrical grid this week and will be unplugged for the remainder of January. The move comes as the country struggles with electrical shortages caused by crypto mining, as well as blackouts during the winter months.

Crypto Miners in Kazakhstan Left Without Power

Bitcoin mining operations in Kazakhstan were cut off from the power grid on Monday, January 24, and will remain offline until January 31, according to local media. The limits were enforced after KEGOC, the country's state-run grid operator, issued a blackout warning to 196 entities on Jan. 21, according to Informburo.kz.

The power provider sent letters to all 69 registered mining businesses informing them of the cuts, citing "the tense situation with maintaining the balance of electricity and capacity in the unified energy system" as the major cause. The journalist Serikzhan Mauletbay and his colleagues shared a copy of the warning on Telegram.

Following China's crackdown on the mining industry in May 2021, Kazakhstan became a key mining hotspot. Initially welcoming miners and taking moves to regulate the industry, the Central Asian government later blamed them for the country's growing power deficit, which exceeded 7% in the first three quarters of last year. Some mining companies have already had to leave due to electricity constraints.

A major power line in southern Kazakhstan was severed on Tuesday, causing blackouts in parts of the country, Bloomberg reported.  The outage also impacted supplies in neighbouring Uzbekistan and Kyrgyzstan, leaving citizens in all three nations without power.

The blackouts experienced by inhabitants of Southern Kazakhstan on January 25 are not the responsibility of cryptocurrency miners who work legitimately, Informburo.kz noted in its report. The publication quotes, Alan Dorjiyev, president of Kazakhstan's Association of Blockchain and Data Center Industry, the troubles are due to old infrastructure rather than crypto miners. He commented:

How many times have we stated anything like that? In actuality, the miners are not to blame for the lack of electricity. Our entire system is about to collapse.

Kazakhstan has kept its electricity rates restricted, and Dorjiyev noted that the industry is still severely understaffed. "And the miners became an excuse for KEGOC and the Ministry of Energy at some point," Dorjiyev continued.

Russian officials, who had to raise electricity exports to Kazakhstan, cited similar reasons for the current predicament, including a lack of investment in modernising and improving the country's power infrastructure and generation capacity.

In early January, rising energy prices, particularly for natural gas and other fuels, triggered widespread protests in Kazakhstan, which became violent. To put a stop to the disturbance, the authorities censored the internet and shut down local banks. The issue impacted crypto mining as well, posing a threat to the global bitcoin hashrate, of which the country accounted for over 18 percent last year.