Tajikistan introduces penalties for illegal cryptocurrency mining

Key points:

• Tajikistan is introducing criminal penalties and heavy fines for those who illegally use electricity for mining.
• The authorities claim that illegal farms have caused power outages and caused significant financial damage to the state.

The Tajik authorities intend to tighten liability for people involved in cryptocurrency mining and using electricity without paying for it. The country is preparing for the cold season, and the power grid is already experiencing outages, so combating illegal energy consumption is becoming a priority.

The government has decided to introduce severe fines and imprisonment for the use of mining equipment connected to the grid illegally. These measures are enshrined in a package of amendments recently approved by both houses of parliament. A new article has been added to the Criminal Code, providing for punishment for mining cryptocurrency using electricity without permission.

Penalties for violators will range from 15 000 to 37 000 somoni (approximately $1600–$4000). If a group of people is involved in an illegal scheme, the amount of sanctions will increase to 75 000 somoni (more than $8000), and violators may face two to five years in prison. For large-scale electricity theft, the term may be increased to eight years.

Reasons for the tightening of measures and damage to the country’s energy system

Prosecutor Habibullo Vohidzoda said that numerous illegal crypto farms have put severe pressure on the power grid and caused outages in several regions. He added:

“The illegal circulation of virtual assets facilitates a number of crimes, such as electricity theft, material damage to the state, money laundering, and other offenses.”

According to the authorities’ estimates, the damage from illegal mining amounted to about 32 million somoni (approximately $3,5 million). Some farm owners imported equipment from abroad, violating import regulations.

According to MP Shukhrat Ganizoda, another goal of the amendments is to prevent tax evasion by people involved in cryptocurrency mining. The law will come into force after it is signed by President Emomali Rahmon.

In October, the Canadian province of British Columbia banned new cryptocurrency mining projects, tightening controls on the use of clean electricity.