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Bitmain-Backed BitFuFu Abandons Mining Rigs In Kazakhstan Due to Power Rationing

·2-min read

BitFuFu is abandoning its mining rigs in Kazakhstan and buying new ones from Bitmain and setting them up in the U.S., after weeks of power rationing in the Central Asian country, BitFuFu told CoinDesk on Thursday.

  • Kazakhstan has been facing severe electricity shortages, partly because of the influx of crypto miners in the country, but also because of pre-existing problems with its energy infrastructure. The national grid operator moved to ration electricity to crypto mines in September.

  • In November, the Ministry of Energy assured the industry that the government won’t restrict electricity to legal mines. But the rationing didn’t stop. Last month, miner Xive shut down a 2,500-rig facility in Kazakhstan because of energy shortages. Industry sources estimate legal mines with 200 to 500 megawatts of power have been cut off from the grid.

  • BitFuFu’s new machines have already arrived in the U.S., a company spokesperson told CoinDesk. The company previously told users that it was facing delays taking the machines through customs and transporting them to the mines because of the Thanksgiving holiday.

  • BitFuFu users have been watching their investments sit idly as the platform’s Kazakhstan facilities are offline.

  • One user told CoinDesk that BitFuFu’s machines have been completely offline for a little over one month, adding that he would leave the platform if it gave him his money back. Another said that disruptions started in mid-October and that they are worried, but not angry at the service. Users who spoke to CoinDesk refused to be named because their contracts with BitFuFu include anti-defamation clauses.

  • The mining platform acknowledged the problem stemming from Kazakhstan’s electricity rationing in an Oct. 14 Telegram message, saying it would compensate users by extending their contract for as long as their machines are offline.

  • According to the Financial Times estimates, BitFuFu has 80,000 rigs in Kazakhstan after moving there from China because of a government crackdown on crypto mining. A company spokesperson refused to comment on the estimate.

  • The BitFuFu spokesperson told CoinDesk the company might try to sell its machines in Kazakhstan, but hasn’t reached a decision yet.

  • BitFuFu is a platform that enables users to invest in mining without having to operate the facilities.

Read more: Kazakhstan’s Crypto Miners Face New Regulations After Contributing to Power Shortages

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