By Richard Hines
With new crypto regulations signed into law, Kazakhstan is no longer the safe haven it once was. Lawmakers in the country have passed new regulations governing bitcoin mining and have also embarked on taxing these mining firms.
Kazakhstan, No Longer The Crypto Safe Haven
With the regulatory circus spreading around, Kazakhstan has become the latest country to sign a new crypto currency regulation regarding crypto mining in its country. This bill, titled “On Digital Assets of the Republic of Kazakhstan,” is solely focused on the crypto mining aspect of the crypto sector.
Following the incident involving Chinese miners, Kazakhstan emerged as the next safe haven due to its low electricity costs and leniency toward cryptocurrencies.
However, as more mining corporations relocated to the country, lawmakers were forced to take drastic measures to prevent abuse of this opportunity, which could have disastrous consequences for the country and its economy.
These lawmakers acted quickly to impose strict regulations on this industry settling to mine bitcoins in their country.
This bill covered fees for electricity usage, an updated taxation scheme for industries, and many more were outlined in the bill.
New Regulations Outlined
Miners would be limited to buying electricity from the public grid.
To conduct their mining operations, they are also given the option to buy electricity from the nation’s Electricity and Power Market Operator.
The drawback of this is that not everyone would have access to this electricity because it would be granted to the highest bidder in an auction-style distribution method.
Firms involved in mining would also receive a license, which is categorized into two. The first will go to firms that already have the necessary tools, infrastructure, and locations in place, while the second will go to miners who still lease cells to conduct their operations and have no energy quota.
Also, new tax reforms in the area of taxes include mining pool capitalism, Value Added Taxes (VAT), and a few other adjustments.
Based on the value of the digital assets and the mining pool rates, corporate income tax will be applied to both corporate and single mining industries.
Additionally, persons who engage in personal activities on crypto will be subject to VAT taxation, while crypto exchanges will be subject to income taxation.