Central Asian nations are facing a surge in illegal cryptocurrency mining, which is straining electricity networks and costing governments millions of dollars.

In Tajikistan, unauthorised mining caused around $3.5 million in losses in the first half of 2025, according to Attorney General Khabibullo Vokhidzoda. Miners have been tapping into the power supply without paying, forcing the government to cover costs for energy providers. In one case, authorities found 135 hidden mining rigs in residential homes, causing over $30,000 in damage. Since January, nearly 4,000 individuals have been implicated in 190 cases of illegal electricity use, with total damages exceeding $4.2 million.

Kazakhstan is dealing with a similar problem. Authorities recently uncovered a scheme where power company employees diverted more than 50 megawatt-hours of electricity—enough to power a city of up to 70,000 people—to unlicensed mining farms. The stolen electricity is valued at about $16.5 million, and assets purchased with the profits, including vehicles and real estate, are now being seized.

Although cryptocurrency mining is not outright banned in Tajikistan or Kazakhstan, both countries have introduced stricter rules. In Kazakhstan, miners must now buy power directly from the Ministry of Energy and adhere to strict usage limits—a response to a mining surge after China’s 2021 crackdown.

Experts say the combination of cheap electricity, inconsistent enforcement, and unclear laws makes Central Asia attractive for both legal and illegal mining. Alex de Vries of Digiconomist points out that Chinese miners moved to Kazakhstan following Beijing’s ban, while Ari Redbord of TRM Labs notes that Russian groups under sanctions have also tapped into crypto networks in the region.

Even with regulations, small-scale illegal mining continues. China still contributes about 20% of global Bitcoin mining despite its ban, highlighting how difficult it can be to fully eliminate illegal operations in countries like Tajikistan and Kazakhstan.