Kazakhstan Shuts Down Illegal Crypto Mining Network Draining Power from City Grid

Kazakh authorities have dismantled a vast illegal mining operation in East Kazakhstan Oblast that was consuming enough electricity to power an entire mid-sized city.

Investigators allege the network relied on corrupt utility insiders to divert energy away from homes, hospitals, and strategic industries, funneling it instead into hidden facilities dedicated to minting cryptocurrency. Officials estimate the miners used more than 50 megawatt-hours of electricity, valued at roughly 9 billion tenge ($16.5 million).

Luxury Assets Seized

Prosecutors say the illicit profits were used to acquire high-end apartments in the capital and multiple vehicles, all of which have now been seized pending court proceedings. The investigation revealed the operation’s extensive reach, from energy diversion to money laundering through luxury property.

From Mining Haven to Enforcement Hotspot

Kazakhstan became a global mining hub after China’s 2021 ban forced operators to relocate. Initially, the influx was welcomed for its economic potential. But the strain on the national grid soon became apparent, prompting the government to impose strict regulations requiring miners to purchase electricity through a state-run marketplace, capped at one megawatt-hour per transaction.

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Part of a Wider Crackdown

The East Kazakhstan case is part of a broader regional push against unlicensed mining. Russian regulators have launched a national registry for mining equipment, pledging tougher enforcement against underground operators. Meanwhile, France is exploring unconventional approaches — such as redirecting unused nuclear power to regulated Bitcoin mining facilities.

For Kazakhstan, this latest crackdown underscores the economic and infrastructural risks of unchecked crypto mining and signals that regulators are now moving into higher gear to protect public resources.