Illegal cryptocurrency Mining According to Attorney General Khabibullo Vokhidzoda, it caused $3.52 million in damages in Tajikistan in H1.
At a press conference, Vokhidzoda reported that these damages were particularly relevant to the illegal use of electricity by miners, and that energy providers were compensated by the state.
“There are people who import cryptocurrencies from overseas for mining companies and illegally mine cryptocurrencies,” Vokhidzoda said.
Vokhidzoda’s remarks follow a similar update from the Sughd area prosecutor’s office. In the Sughd area, 135 mining equipment was discovered inside a residential building, pursuing seven cases in which damages exceeding $30,000.
Cryptocurrency mining is neither legal nor illegal in Tajikistan, but it occurs in the broader context of illegal, unpaid electricity use in Central Asian countries.
190 criminal cases related to such use have been opened since January, involving 3,988 individuals and carrying out a $4.26 million (so far) damages claim.
Illegal Crypto Mining Issues in Central Asia
Tajikistan is not the only country facing cryptocurrency mining problems within Central Asia, and Kazakh authorities have recently cracked down on a scheme to mine crypto using illegally sourced energy.
Kazakhstan’s financial watchdog and the National Security Committee have discovered that employees of local energy companies have provided 50 megawatt hours (MWH) of electricity to the mining industry for two years only for domestic and commercial use.
This was comparable to the urban energy consumption of 50,000-70,000 residents.
Kazakh authorities also reported that the stolen electricity was worth around $16.5 million, and that the scheme organizers used the proceeds to buy two apartments and four cars, and are now subject to a forfeiture order.
Like Tajikistan, cryptocurrency mining is not strictly illegal in Kazakhstan, but authorities are trying to limit the impact on the country’s energy network.
Recent laws allow mining farms to purchase electricity only from the Department of Energy, and do not allow purchases of less than 1 MWH.
Such regulations aim to limit sectors that have received massive boosts after China banned cryptocurrency mining in 2021, and the combination of inconsistent enforcement in Central Asia has become a magnet for miners.
“We saw mining activities boost mining activities in Kazakhstan after China ousted miners in 2021,” said Alex de Vries, founder of Digiconomist. Decryption. Given the country’s proximity to China and the “beneficial situation” including the rise Bitcoin Price“These may be attractive areas headed by Chinese miners,” he added.
China – and Russia?
Not only the Chinese are growing the mining sector in Central Asia, but also the Russian counterparts.
That is the view of Ari Redbord, global head of policy and government affairs at TRM Labs. Decryption The authorized Russian actor has been leveraging some of the Central Asian crypto ecosystems in recent years, particularly in Kyrgyzstan.
“Given the highly interconnected financial and crypto infrastructure in the region, illegal mining activities in Kazakhstan or Tajikistan could potentially utilize the same cross-border networks, counterparties and liquidation routes that are already being used to avoid sanctions,” he said.
The Chinese example could be beneficial to countries such as Kazakhstan and Tajikistan. This is because Alex de Vries points out that China still has a strong footprint on Bitcoin mining after the blanket ban.
“Their share went from almost 50% to 20% according to Cambridge mining map,” he explained. And although the ban has a “strong influence,” he added, even with a comprehensive mining ban, it is “hard to completely eliminate it.”
As recent cases of Tajikistan and Kazakhstan suggest, small operations could continue to operate under the radar, especially when surveillance and enforcement are weak.
“Central Asia offers an unclear combination of relatively low-cost energy, limited regulatory oversight and, in some cases, mining legal frameworks,” Redbord said. “These conditions create opportunities for illegal operators to carry out unauthorized mining operations on a scale, often beyond the scope of formal compliance and monitoring regimes.”