In an ongoing crackdown of illegal activities tied to crypto, Kazakhstan authorities launched an investigation of a Kazakhstan mining hotel that is suspected of being a cryptocurrency pyramid. Bincloud was a platform that lured investors via popular messaging apps.
Bincloud Operators Kept 16% of Investors’ Funds for Themselves
Amid intensified efforts to fight crypto-related fraud, Kazakhstan’s Financial Monitoring Agency has initiated a pre-trial investigation into a crypto mining business allegedly working as a financial pyramid scheme. It’s led by the watchdog’s department in the West Kazakhstan region, the FMA announced, quoted by Russian crypto media.
Bincloud Mining Hotel was set up to recruit investors via Telegram and Whatsapp messengers. They convinced them to invest in the rental of mining equipment. The investors were promised a daily return of 5-6 percent of their investment.
The fraudsters withheld 16% of the hotel users’ income, a press release detailed. Kazakhstan’s financial regulators are urging victims of the suspected Ponzi scheme to contact the regional departments of the Financial Monitoring Agency and report about their cases.
As part of an ongoing government campaign against cryptocurrency crime, the Bincloud probe was launched. Kazakhstan’s police recently busted a gang, the members of which allegedly forced IT specialists to run underground crypto farms on their behalf.
It brought in an average of half a million dollars per month to its owners through illegal mining operations. Reports in media suggest that the criminal group couldn’t have done so without being protected or having an affiliation with businessmen and high-ranking officials.
The Business Climate in Kazakhstan for Cryptominers Is Shifting
Kazakhstan, with its artificially low electricity rates made it an attractive destination for crypto mining companies. China took down the sector in May 2021. But things have improved and companies have begun to move their hardware to more mining hotspots.
While the administration of President Kassym-Jomart Tokayev has indicated it wants to develop the country’s crypto industry, the growing energy deficit blamed on the influx of miners influenced its policies in the sector while it also started cracking down on illegal mining.
In February, Kazakhstan’s head of state emphasized the government in Nur-Sultan is not against crypto mining within the law but insisted that all mining facilities should be identified and inspected by the FMA. The decision was made as many mining firms were faced with power outages during the winter.
Tokayev, in July, signed a law that raised taxes on registered miners. Tokayev signed a law that established tax rates that were based upon the cost of electricity used to create digital coins. This increased the annual surcharge.
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