500 illegal cryptocurrency mining farms blocked in Kyrgyzstan

The Kyrgyz authorities have blown up 500 crypto mining farms illegally operated in the country, a local news agency reported yesterday.

Kyrgyzstan destroys 500 illegal crypto mining farms

Law enforcement agencies in Kyrgyzstan have actively controlled the cryptocurrency mining operation as it draws too much energy from the power grids, which often leads to power shortages.

The Kyrgyzstan State National Security Committee (SCNS) says it discovered and cracked down on 500 illegal cryptocurrency mining farms run by an unidentified citizen. The farms are illegally connected to the distribution company’s power grid, which has caught the attention of authorities as cryptocurrency mining farms use a significant amount of energy.

In addition, SCNS also highlights the unsustainable nature of cryptocurrency mining, as mining devices use up to 3,000 kilowatts of electricity per hour.

SCNS said: “It should be noted that mining farms lead to electricity bottlenecks as a single set of equipment consumes around 1,500 to 3,000 kilowatts per hour.”

The Kyrgyz authorities are ready to regulate cryptocurrencies. However, they always stay away from illegal crypto mining farms as it is unsuitable and it puts a heavy load on the network. In May, the state’s National Security Commission cracked down on about 2,000 cryptocurrency miners running on stolen electricity.

Cryptocurrency regulation in Kyrgyzstan

Due to the growing interest in cryptocurrencies, the Kyrgyz Central Bank began drafting a bill to regulate cryptocurrencies in the country as they can be used in the country at the end of November 2020.

The draft law is designed according to the guidelines of the Financial Action Task Force (FATF) and is intended to help the Kyrgyz authorities to examine the risks of money laundering and terrorist financing in cryptocurrencies.

The draft supports the government’s decision to regulate the cryptocurrency exchange market and sets the legal framework for the circulation of digital assets in the country. The ministry stressed the need for cryptocurrency regulations as essential to efforts to facilitate technological growth and innovation, as well as risk control.

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