Kazakhstan Introduce Laws to Kick Out Crypto Mining Tax Fraud

More than three years after saying that crypto mining in Kazakhstan won’t be taxed until it is exchanged for fiat currency, a new law has been introduced to mitigate tax fraud and any illicit business operations in the ecosystem. President Kassym-Jomart Tokayev, the leader of Kazakhstan signed this new crypto regulation to push out unlawful mining operations in the region.

According to the signed document, digital asset issuers which have been deemed secured will be expected to receive authorization from the government before proceeding to roll out their services. This is one of the two laws that were introduced to kick out illegal transactions. It is noteworthy that these new regulations do not nullify the existing crypto laws of Kazakhstan.

Rather, the existing laws will be used as a standard to monitor the digital asset issuer “On Combating the Legalization (Laundering) of Proceeds from Crime and the Financing of Terrorism.” 

This first law will be fully implemented from April 1st, 2023. 

Crypto Miners to Swap 75% of Revenue on Exchanges 

Unsecured digital assets obtained from crypto mining operations are the focus of the second law signed by President Tokayev. There is an issue of tax evasion which the country intends to eradicate or at least mitigate. To achieve that, Kazakhstan crypto miners will be compelled to put up 75% of their revenue for sale through the service of registered cryptocurrency exchanges.

The result of this law is that the Kazakhstan tax office will be equipped with “information on the income of digital miners and digital mining pools for tax purposes.” This law takes effect from January 1st, 2024 to January 1st, 2025. Not certain how crypto miners in Kazakhstan will respond to these laws, however, this will not be the first time that the government is trying to put a leash on its crypto-mining industry.

Last year, Kazakhstan came up with a new measure that requires miners to establish registered entities which can only operate after receiving approval from the appropriate financial regulators. Also, these crypto miners were expected to continue paying tax based on the outlined taxation policy in the region.

“At the same time, the activities of miners and mining pools will be regulated and licensed by the Ministry of Digital Development, Innovation, and Aerospace Industry,” Ekaterina Smyshlyaeva, a member of the Committee on Economic Reform and Regional Development said.