Kazakhstan lawmakers pass new Bitcoin mining bills

Lawmakers in the country have passed the “On Digital Assets of the Republic of Kazakhstan” bill on cryptoassets and other laws that focus on cryptomining. Mäjilis, or the lower hours of the Parliament of Kazakhstan, approved the four bills.

After the Chinese mining exodus, Kazakhstan emerged as one of the preferred destinations due to cheap electricity. But as crypto mining has boomed, lawmakers have come up with hostile measures against the industry.

Strict rules

The details of the five bills that introduce a new electricity purchase scheme for mining equipment, as well as updated licensing and taxation schemes, were shared by Didar Bekbauov, co-founder of Xive, a platform for crypto mining solutions.

Miners will now be required to purchase only excess power from the public grid. Exclusive purchase of electricity through Kazakhstan Electricity and Power Market Operator [KOREM] exchange can also be performed by the miners. However, not everyone will be able to make this purchase, as electricity will be sold in an auction format – meaning the highest bidders win.

The mining license procedure is categorized into two. The first will involve the digital miners owning the right infrastructure – data processing centers with appropriate equipment, location and security requirements.

The second category is for digital miners – equipment owners who rent cells in data centers and do not require an energy quota.

Commenting on the bill, a member of Mäjilis’ Committee for Economic Reform and Regional Development, Ekaterina Smyshlyaeva, so:

“The bill, in addition to mandatory accreditation, introduces separate requirements for mining pools regarding the location of their server capacity in Kazakhstan and compliance with information security rules.”

Crypto Clampdown Inevitable?

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

With the new rules approved, both individual miners and mining pools will be subject to corporate income tax based on the value of the crypto assets as well as the commission rates of the pools. In addition to that, Majilis also wants to enforce a general ban on advertising for crypto transactions and design regulations specifically for “cryptocurrency values”.

In addition, individuals carrying out crypto transactions will also be subject to VAT along with corporate tax on crypto exchanges.

The latest development comes over a month after Mäjili green-lighted a bill that sought to establish appropriate regulations in the domestic crypto sector. As such, crypto miners and mining pools will fall under the Ministry of Digital Development, Innovation and Aerospace Industries.