Law enforcement in Kyrgyzstan confiscated thousands of bitcoin mining devices as part of operations against the illegal mining of cryptocurrencies in the country. The companies that supplied the mining facilities with electricity were also identified.
The National Security Committee (GKNB), which is responsible for fighting organised crime in Kyrgyzstan, recently located and raided cryptocurrency mining facilities, mainly in the capital Bishkek and the northern province of Chuy Oblast.
About 2000 cryptocurrency mining devices were confiscated, according to Sputnik Kyrgyzstan, which in turn cited announcements by the National Security Commission. It is also noted that law enforcement operations continue.
According to the National Security Committee, the cryptocurrency mining operations are causing a huge damage to the country’s electricity network, while several large industrial units that supplied energy to illegal mining companies were revealed. Most of these companies are located in the capital Bishkek, while several of the confiscated mining equipment were located in the facilities of the Bishkek Free Economic Zone. Police are currently working to identify all those involved in these activities.
Last August, the country’s finance ministry introduced a bill regulating taxation on bitcoin mining activities in Kyrgyzstan. According to it, a tax of 15% is imposed on the cost of electricity consumed by the cryptocurrency mining operations, while at the same time the required license is introduced in order for the mining activity to be considered legal.
In January this year, the National Bank of Kyrgyzstan announced the preparation of two bills to regulate the operation of local cryptocurrency exchanges, according to which various measures are introduced to reduce the risk of money laundering and financing terrorism. Trading platforms were required to report their activities to government agencies.
Cryptocurrencies have become very popular in Kyrgyzstan over the past year as a new type of investment opportunity, but also as a means of cross-border payments. Last October, the country’s central bank suspended the execution of SWIFT orders, which helped further the adoption of cryptocurrencies by a large portion of the country’s citizens.