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Large-scale Illegality in East Kazakhstan: Unlawful Electricity Sales to Mining Companies
A major scheme of illegal electricity sales to mining companies in East Kazakhstan has been uncovered by the Financial Monitoring Agency's local department. This illicit activity has resulted in the diversion of over 50 megawatt-hours (MWh) of power, equivalent to the energy consumption of a city with a population of 50,000 to 70,000 residents[1][3].
The scheme, which has been ongoing for two years, has seen employees from local utility providers illegally selling electricity to crypto mining farms. Under Kazakhstan’s law, mining farms are only allowed to buy electricity directly via a state-run platform operated by the Ministry of Energy, with a limit of 1 MWh or less[1][3]. However, this scheme flagrantly violated these regulations.
The losses from this illegal activity have been substantial, exceeding $16 million[1][3]. In an effort to combat this issue, Kazakh authorities, including the Financial Monitoring Agency (AFM) and the National Security Committee (KNB), have dismantled the operation, conducting raids and investigations. Although exact penalty details are not specified, the scale of the operation and the involvement of utility employees suggest serious legal consequences, including potential criminal charges[3][5].
In addition, assets linked to the scheme have been seized, aiming to recover losses and disrupt the illegal network that facilitated the power theft[3][5]. The scheme's organizer is reported to have acquired two apartments in the capital and four cars using the proceeds of crime. A court has placed these assets under arrest as part of precautionary measures for potential confiscation[3][5].
It's important to note that this investigation is separate from a fraudulent car theft incident that occurred at an auto showroom. However, the organizer of the electricity sales scheme is also believed to be involved in this incident[6].
This case serves as a reminder of the importance of adhering to the legal framework and the consequences of violating regulations. In this instance, the violation has led to significant disruptions in the energy supply for legitimate consumers in the region, and substantial financial losses.
Impact on energy supply: The scheme diverted enough electricity to power a sizable city, depriving residential and critical sectors of their rightful energy, thereby straining and disrupting regional energy availability[1][3].
Legal framework: Mining farms must legally purchase electricity only through state channels, with strict usage caps; this scheme violated those regulations[1][3].
Penalties: The investigation has led to raids, dismantling the illegal operation, and asset seizures, indicating strong enforcement action and likely criminal prosecution for those involved[3][5].
[1] Financial Monitoring Agency press release [2] Telegram channel subscription information (no new factual information) [3] Kazakh Ministry of Energy press release [4] Kazakh National Security Committee press release [5] Court decision on asset seizure [6] Police report on car theft incident
The illegal electricity sales scheme in East Kazakhstan, directed towards mining companies, has significant implications for the general-news and finance industries, as it illegally diverted energy worth millions in finance from the country's utility providers to crypto mining farms. Simultaneously, this general-news and crime-and-justice issue has resulted in a general disruption of energy supply, primarily impacting residential and critical sectors across the region.
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