Authorities in Kyrgyzstan have uncovered and shut down a large crypto mining farm in the north of the country. Law enforcement officials claim the illegal coin minting facility has inflicted “colossal damage” to the nation’s power grid and that they are still trying to estimate the losses.

The region of Central Asia, including the Republic of Kyrgyzstan, has become a hotspot for cryptocurrency mining lately. Companies involved in the extraction of digital coins have been attracted by its low energy rates amid an ongoing crackdown on the industry in China.

The influx of miners has been blamed for electricity shortages and some countries have been moving to mitigate a growing power deficit. In early October, reports revealed that the Kyrgyzstan government had raised the electricity tariff for crypto mining enterprises, among other consumers, citing the energy-intensive nature of their operations. Lawmakers in neighboring Kazakhstan have proposed a similar measure.

The authorities in Bishkek have also been going after underground cryptocurrency miners. In May, law enforcement agents seized 2,000 mining devices from a number of facilities minting digital currency outside the law at several locations in the capital city and Chuy region.

During a similar operation recently, the State Committee for National Security (GKNB) has busted a large illegal mining farm in the town of Druzhba, Issyk-Ata region. Its officers have confiscated another 2,500 mining machines, a media report has unveiled.

According to a press release issued by the department and quoted by Sputnik Kyrgyzstan, the data center — which was running in a greenhouse — has been operated by foreign nationals. The GKNB further notes that their illegal activities have “caused colossal damage to the electric networks of Kyrgyzstan.”

Investigators are now working to evaluate the losses for the state and establish whether the mining hardware has been legally imported into the country. The committee added that it’s also trying to identify all individuals involved in the undertaking.

Kyrgyzstan has been taking steps to regulate its growing crypto mining sector. In August 2020, the Ministry of Economy put forward a bill introducing taxation for mining activities. The legislation proposes a 15% tax levy on the cost of electricity consumed to mint digital currencies. The law also obliges mining companies to register with regulatory bodies in order to obtain permission to operate in the country.

Do you expect Kyrgyzstan to continue its crackdown on illegal crypto mining operations? Share your thoughts on the subject in the comments section below.