Kazakhstan Police Arrest Gang Forcing IT Experts to Run Crypto Farms
Law
enforcement officers in Kazakhstan detained members of a crime group suspected of
forcing IT experts into operating underground facilities for crypto mining with
threats and blackmail. The racketeers allegedly make around half a million USD per month from their business.
Kazakhstan Cracks Down on Illegal Crypto Mining Organization
Authorities
in Kazakhstan have apprehended a group of "criminally oriented
individuals" and former convicts who entrapped people who were knowledgeable in information and crypto technology to run illegal cryptocurrency production installations. Many of
the 23 people apprehended had a background in debt collection and extortion,
the Interior Ministry said in a statement this week.
The gang was
making estimated profits in the range of USD 300,000 to 500,000 each month from
illegal crypto mining activities, the department further revealed. Police found several weapons, including pistols, ammunition, and a
Kalashnikov assault rifle during the search operations. One of the gang members was identified as an army
serviceman.
Investigators
were able to establish that the undertaking was well organized, an indication
that the group had powerful connections, reports news outlet Eurasianet. The
online portal which covers developments in the region said recently that major
mining operations in Kazakhstan were linked to high-ranking officials and
powerful businessmen.
Kazakhstan
became a crypto mining hotspot after China cracked down on the industry in May
last year. Mining companies were drawn by its low electricity rates, but
their influx caused an increasing energy deficit. The government in Nur-Sultan
responded by taking steps to reduce consumption in the sector
by cutting power supply to licensed mining enterprises on several
occasions, increasing a tax levy, and pursuing illegal miners.
The Financial
Monitoring Agency discovered and shut down more than 100 underground
mining farms. The agency has disclosed that among its operators were firms
affiliated with Bolat Nazarbayev, brother of Kazakhstan’s former President,
Nursultan Nazarbayev, and Alexander Klebanov, who heads the Central Asian
Electricity Corporation.
Some of the
other closed-down facilities were linked to Kairat Sharipbayev, who is the
former Chairman of the National Gas Distribution Company Qazaqgaz and is
believed to be married to Nazarbayev’s eldest daughter, Dariga. Yerlan
Nigmatulin, brother of the former speaker of the Lower House of Parliament is
also suspected of having profited from unauthorized mining, the report details.
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