Kazakhstan: Police arrest gang forcing IT specialists to operate block reward mining farms

A press release by the Kazakh Ministry of Internal Affairs (MIA) asserted that the arrests were made through a joint operation carried out by its Department for Combating Organized Crime, Department 5 of the National Security Committee(also KNB), and the police departments of the cities of Almaty, Shymkent, Aktobe and Zhambyl.


The total number who were put behind bars was 23, as per authorities few were already convicted with records of acquisitive and violent crimes including an army serviceman.

Block reward mining equipment worth over $7 million was confiscated from the gang’s facilities.

The MIA stated the investigations found that the gang had been forcing a 36-year-old IT specialist to run its illegal block reward mining farm through threats and blackmail. The farm attained the gang an estimated $300,000 to $500,000 monthly.

Kazakhstan determined to regulate block reward mining

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Earlier this year, Kazakh authorities found and shut down over 100 illegal block reward miners and this was not the first time Kazakhstan is taking strict action against illegal block reward mining outfits in the country.

The operation saw it seize over 65,000 pieces of mining equipment worth an estimated $195 million. The government also blamed the culprits of various crimes, including operating in special economic zones without permission, illegally using subsidized energy, and tax and customs evasion.

The illegal mining outfits have also been found to have links to several affluent Kazakh politicians and businessmen. Back in March, Eurasianet reported that a brother of the country’s former president Nursultan Nazarbayev was found to be backing some of the entities.

Meanwhile, Kazakhstan has also been tightening regulations guiding the local block reward and digital assets industry. It has introduced new license registration guidelines for block reward miners and digital assets exchanges. It has also amended its tax and electricity bill regimes for block reward miners.

Kazakhstan remains one of the largest global contributors to the hash rate of the Bitcoin network. The country rose in the ranks after its neighbor China banned the activity, forcing an influx of miners to the country. Kazakhstan has also been finding it challenging to meet the energy demands of block reward miners.

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