Kazakhstan authorities have uncovered and dismantled a massive illegal electricity supply scheme linked to crypto miners, estimated to have siphoned off $16.5 million worth of power over two years.
The operation was uncovered by Kazakhstan’s Financial Monitoring Agency (AFM) and the National Security Committee (KNB) in the East Kazakhstan Oblast region. Employees of local utility providers were found to have illegally sold electricity to mining farms, diverting power originally intended for local inhabitants, social services, and strategic businesses.
The crypto miners involved used over 50 megawatt-hours (MWh) of electricity during the scheme, an amount comparable to the energy needs of a city with between 50,000 and 70,000 residents.
According to Kazakhstan's laws, mining farms can only buy electricity from a state-run platform operated by the Ministry of Energy and must not exceed purchasing more than one MWh at a time. This illicit operation flagrantly bypassed those regulations.
The criminal proceeds from this illegal power theft were reportedly used to buy luxury items, including two apartments in the capital and four vehicles, which are now subject to court seizure.
Following China’s ban on crypto mining, Kazakhstan had become a major hub for crypto mining. However, after facing power shortages and grid instability, the government began tightening regulation and cracking down on unlawful mining activities.
This case forms part of a larger regional crackdown on illegal crypto mining, with neighboring countries such as Russia also intensifying surveillance and enforcement against unauthorized miners. Meanwhile, other countries like France are exploring regulated energy use strategies to accommodate crypto mining demands.
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