Authorities in Kazakhstan have opened an investigation into a mining hotel company suspected of being a cryptopyramid as part of an ongoing crackdown on illegal cryptocurrency-related activities. Dubbed Bincloud, the platform attracted investors through popular messaging apps.
Bincloud operators kept 16% of investor funds for themselves
Amid increased efforts to combat crypto fraud, the Financial Watchdog of Kazakhstan has launched a pre-trial investigation into a crypto mining company allegedly operating as a financial pyramid scheme. It is headed by the regulator in the western Kazakhstan region, the FMA announced, quoted by Russian crypto media.
The people behind Bincloud Mining Hotel recruited investors via Whatsapp and Telegram Messenger and convinced them to put money into the project, which offers mining equipment rental. As a reward, they were promised to get back 5 to 6% of the invested amount every day.
The scammers withheld 16% of hotel users’ earnings, according to a detailed press release. Kazakhstan’s financial watchdog is urging victims of the suspected Ponzi scheme to contact the Financial Monitoring Agency’s regional departments and report their cases.
The Bincloud investigation is part of a government offensive against cryptocurrency-related crime. Kazakhstan police recently arrested a gang whose members allegedly forced IT specialists to run underground crypto farms on their behalf.
The illegal mining operation brought in an estimated half a million US dollars in monthly revenue for its organizers. Media reports indicate that the criminal group, like other similar companies, could not have acted without protection or connections to high-ranking officials or businessmen.
The business climate for crypto miners in Kazakhstan is changing
Kazakhstan maintained artificially low electricity tariffs and became a magnet for crypto mining companies when China cracked down on the industry in May 2021. However, things have changed since then and some companies have already moved their hardware to other mining hotspots.
While President Kassym-Jomart Tokayev’s government has indicated that it intends to develop the country’s crypto industry, the growing energy deficit, attributed to the influx of miners, influenced its policies in the sector, while it also began cracking down on illegal mining .
In February, Kazakhstan’s head of state stressed that the Nur-Sultan government was not opposed to crypto mining under the law, but insisted that all mining facilities should be identified and inspected by the FMA. The order came as mining companies faced power outages during the cold winter months.
In July, Tokayev signed a law increasing the tax burden for registered mining companies. The legislation introduced differentiated tax rates based on the average price of electricity used to mint digital coins, increasing the surcharge levied earlier in the year.
Do you expect the authorities in Kazakhstan to conduct further investigations into the crypto space? Tell us in the comment section below.
photo credit: Shutterstock, Pixabay, Wiki Commons, Artie Medvedev
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