Kyrgyzstan is one of the upcoming cryptocurrency mining hotspots in the globe. The cheap electricity prices have drawn in multiple crypto mining firms in the nation.
Since crypto mining is a power-hungry process, the nation once cut off the power supply to 45 crypto miners for consuming 136 megawatts of electricity, which is more than what is consumed by three Kyrgyzstan regions: Issyk-Kul, Talas, and Naryn.
Now, reports have emerged that local authorities have now discovered a large scale illegal crypto mining operation at the Free Economic Zone “Bishkek”.
According to a local media outlet, the State Service for Combating Economic Crimes, an anti-corruption service in the Kyrgyz Republic, discovered the mining site at FEZ Bishkek, during an on-site inspection.
The authorities have started an investigation to track the origin of the miners and their energy source after discovering multiple crypto mining devices connected to electricity and the Internet.
The report alleges that members of the local government organizations and corrupt executives from the FEZ are involved in covering up the mining facility.
FEZ Bishkek is a local territory for the development and expansion of private businesses in the capital of the Kyrgyz Republic. It has been active for more than 20 years, according to the official website.
A future for crypto mining in Kyrgyzstan?
Authorities in Kyrgyzstan have actively ventured into making cryptocurrency mining a legitimate industry.
As previously reported by the Daily Chain, local authorities are considering a bill dubbed ‘Amending the Tax Code of the Kyrgyz Republic’ to tax and regulate the crypto mining industry.
The bill seeks to boost government revenue from cryptocurrency mining by implementing tax obligations for miners, while also clearly defining the terms ‘virtual assets’ and ‘mining’ in the context of cryptocurrencies.
If passed, crypto miners would be taxed at flat 15% of profits generated from selling the mined crypto assets.
The bill is expected to capture an additional $4.2 million toward the Kyrgyz Republic’s roughly $1 billion annual budget.However, several officials have previously highlighted that the nation isn’t suited to handle the impact of large-scale crypto-mining activities on the nation’s electricity system, as the nation reportedly imports nearly twice as much power as it exports.