Crackdown Alert: Tajikistan and Kazakhstan See Surge in Underground Bitcoin Mining Operations
Power-hungry crypto farms are draining grids—and dodging regulators—across Central Asia.
Black Market Hashrate Boom
Authorities report a spike in illegal mining operations capitalizing on lax enforcement and subsidized electricity. No official numbers yet, but the trend mirrors 2021’s energy crises when rogue miners consumed 8% of Iran’s power output.
Geothermal Gold Rush Gone Rogue
Kazakhstan’s failed attempt to legitimize mining post-China ban now fuels underground activity. Tajikistan’s hydroelectric surplus? Diverted to makeshift ASIC farms in abandoned Soviet factories.
Regulators Play Whack-a-Mole
Raids net outdated rigs while smarter operators bribe officials or spoof residential meters—because nothing says 'financial innovation' like stealing public infrastructure to print magic internet money.
Central Asia’s illegal crypto mining problem
Tajikistan is not the only nation within Central Asia to face a mounting cryptocurrency mining problem, with authorities in Kazakhstan recently cracking down on a scheme to mine crypto using illegally sourced energy.
Working together, Kazakhstan’s Financial Monitoring Agency and National Security Committee discovered that employees of local energy companies had, over the course of two years, provided mining enterprises with more than 50 megawatt-hours (MWh) of electricity meant for domestic and commercial use.
This was equivalent to the energy consumption of a city of between 50,000 and 70,000 inhabitants.
Kazakh authorities also reported that the stolen electricity was worth approximately $16.5 million, and that the scheme’s organiser used its proceeds to purchase two apartments and four cars, which have now become subject to a confiscation order.
As with Tajikistan, cryptocurrency mining is not strictly illegal in Kazakhstan, but authorities have been trying to limit its impact on the nation’s energy grid.
A recent law stipulates that mining farms are permitted to buy electricity only from the Ministry of Energy, and that they cannot buy more than 1 MWh or less.
Such regulations have been aimed at limiting a sector which gained a massive boost after China banned cryptocurrency mining in 2021, with Central Asia’s combination of cheap costs and inconsistent enforcement making it a magnet for miners.
“We previously saw mining activities getting a boost in Kazakhstan after China kicked miners out in 2021,” Digiconomist founder Alex de Vries told Decrypt. Given the country’s proximity to China, and “beneficial circumstances” including the rising price of Bitcoin, “these might be attractive areas for Chinese miners to head to,” he added.
China—and Russia?
It’s not only Chinese miners who may be growing Central Asia’s mining sector, but also their Russian counterparts.
That's the view of Ari Redbord, Global Head of Policy and Government Affairs at TRM Labs, who told Decrypt that sanctioned Russian actors have Leveraged parts of the Central Asian crypto ecosystem in recent years, particularly in Kyrgyzstan.
“Given the region’s highly interconnected financial and crypto infrastructure, illicit mining activity in Kazakhstan or Tajikistan could tap into the same cross-border networks, counterparties, and liquidation pathways already used for sanctions evasion,” he said.
China’s example could be an instructive one for nations such as Kazakhstan and Tajikistan, since Alex de Vries notes that China continued to have a strong footprint in Bitcoin mining even after its blanket ban.
“Their share went from almost 50% to 20% according to the Cambridge mining map,” he explained. And while bans have a “strong impact,” he added, even with comprehensive mining bans it’s “difficult to completely eliminate it.”
As the recent cases in Tajikistan and Kazakhstan suggest, smaller scale operations can continue to operate under the radar, especially where oversight and enforcement is weak.
“Central Asia offers a combination of relatively low-cost energy, limited regulatory oversight, and, in some cases, unclear legal frameworks for mining,” said Redbord. “Those conditions create opportunities for illicit operators to run unlicensed mining operations at scale, often beyond the reach of formal compliance and monitoring regimes.”
