How Kazakhstan Rationed Electricity for Crypto Mining and What It Means for Miners

When China banned cryptocurrency mining in 2021, thousands of mining rigs packed up and moved east-to Kazakhstan. What followed wasn’t a boom. It was a crisis.

Kazakhstan’s power grid, already stretched thin in winter months, suddenly had to power entire data centers running 24/7. Homes went dark. Hospitals rationed power. Schools turned off heaters. The government watched as miners-some legal, most not-drained electricity meant for people, not machines.

By 2025, the state had had enough. It didn’t ban mining. It didn’t shut it down. It took control.

The State Took Over the Power Grid

Kazakhstan didn’t just slap on a cap. It built a whole new system.

Now, every legal crypto miner must buy electricity through a state-run marketplace managed by the Ministry of Energy. No more direct deals with local utilities. No more hidden meters. Every transaction is tracked, logged, and capped at 1 megawatt-hour per purchase. That’s not much for a large mining farm. To keep running, operators have to make dozens of purchases a day. It’s slow. It’s bureaucratic. But it’s controlled.

And it’s not just about buying power. Miners must sell 75% of the Bitcoin or other coins they mine on the Astana International Financial Centre (AIFC) platform. That rule went up from 50% in 2024. The government wants to control the flow of crypto out of the country-limiting capital flight and keeping transactions visible.

There are only 84 licenses for legal mining operations. Five mining pools are officially accredited. Over 415,000 mining machines are registered in a national database. Every rig has a digital fingerprint. If it’s not on the list, it’s illegal.

The $16.5 Million Heist

But for every legal miner, there are ten operating in the shadows.

In October 2025, authorities in East Kazakhstan Oblast cracked down on a massive illegal mining ring. Over two years, the operation siphoned off more than 50 megawatt-hours of electricity-worth 9 billion tenge ($16.5 million). That’s enough power to run a city of 60,000 people.

The thieves weren’t some shadowy tech gang. They were utility employees. Workers who had access to power lines, meters, and billing systems. They rerouted electricity meant for hospitals, schools, and apartment buildings straight to hidden mining farms. The profits? Two luxury apartments in Nur-Sultan. Four new cars. All seized by court order.

This wasn’t an outlier. It was the tip of the iceberg. The government estimates that illegal mining drains at least 20% of the country’s total electricity output. That’s not just theft-it’s a public safety threat.

Who Wins? Who Loses?

The rationing system didn’t make mining cheaper. It made it harder.

Small operators with a few hundred rigs can’t afford the compliance costs. The legal paperwork. The accounting for AIFC sales. The 15% tax on profits. For them, the cost of staying legal eats up 10-15% of their earnings. Many just shut down-or went underground.

Big players? They’re adapting. Firms with capital, legal teams, and connections to foreign investors are thriving. Some are even negotiating with the government on new energy deals. One proposal under review would let foreign companies build new thermal power plants. In return, they’d get 30% of the output for mining. The rest goes to the grid. It’s a trade: more power for everyone, if you play by the rules.

But even the big guys complain. The 1 MWh purchase limit forces them to make constant transactions. The state platform glitches. Delays happen. Some miners say they lose hours of uptime waiting for approvals. It’s not a free market. It’s a tightly controlled auction.

Global Context: Why This Matters

Kazakhstan isn’t alone. The world is rethinking crypto’s energy hunger.

Bitcoin mining now uses about 168.3 terawatt-hours per year-roughly 0.55% of global electricity. That’s more than the entire country of Argentina. And it’s growing.

France is looking at using idle nuclear power for regulated mining. Russia is launching a national registry for mining equipment. The U.S. has state-by-state rules, but no federal cap. Kazakhstan’s model is extreme-but it’s also one of the few that actually works.

Other countries are watching. Can you tax crypto mining without killing it? Can you track rigs without driving miners underground? Kazakhstan is the real-world lab.

What’s Next?

The government says it’s not trying to kill mining. It’s trying to tame it.

Legislators are pushing to decriminalize crypto trading for users on licensed platforms. That could open the door for more legal wallets, exchanges, and even crypto banking. But only if miners stay clean.

The East Kazakhstan bust has triggered new audits of utility companies. More cameras. More audits. More jail time for corrupt employees. The message is clear: if you steal power for mining, you’re not a tech pioneer. You’re a criminal.

For miners outside Kazakhstan, the lesson is simple: regulation is coming. Not because governments hate crypto. But because they can’t afford to let it burn through public infrastructure.

Energy isn’t free. Electricity isn’t infinite. And no country will let a handful of miners turn off the lights for millions of people.

Can You Still Mine Legally in Kazakhstan?

Yes-but only if you’re prepared.

• You need one of the 84 active licenses.
• All your machines must be registered in the national database.
• You must buy electricity only through the state marketplace-1 MWh at a time.
• You must sell 75% of your mined crypto on AIFC.
• You pay 15% tax on profits.
• You keep detailed logs of every transaction, every hour, every day.

It’s not impossible. But it’s not easy. And it’s not cheap.

Miners who came to Kazakhstan hoping for a wild west now face a courtroom, a spreadsheet, and a government monitor.