As the world becomes increasingly digital, the demand for cryptocurrencies continues to rise. However, this has led to numerous challenges for cryptocurrency miners, particularly in light of political and regulatory crackdowns. Businesses must be nimble and adaptable to survive and thrive in this rapidly changing landscape. At our company, we understand the importance of international connectivity and how it can benefit our customers in the world of cryptocurrency mining. Our international mining infrastructure is flexible enough to adapt to changing regulations and guidelines.

Recently in Venezuela, the government has recently closed all mining facilities.
Venezuela's government officials were allegedly involved in parallel oil operations with the help of the national crypto department. In response, the country's energy supplier shut down crypto mining facilities as part of a reorganization of the crypto department and corruption investigations involving the oil company. Some crypto exchanges were also ordered to stop operations. This step has disrupted the operations of many mining companies, causing them to lose significant revenue.

Similarly, in the United States, the Biden administration has proposed a 30% tax on cryptocurrency mining electricity consumption.
The department's "Greenbook," which is a list of tax proposals and justifications for the U.S. President's budget proposal, includes the proposal to gradually implement an excise tax on companies that use computing resources to mine cryptocurrencies. The tax would be based on the amount of electricity used for the mining process.

“Digital asset mining creates uncertainty and risks to local utilities and communities, as mining activity is highly variable and highly mobile. An excise tax on electricity usage by digital asset miners could reduce mining activity along with its associated environmental impacts and other harms,” the document added.

The tax would be gradually introduced over a three-year (increasing 10% each year) period and would apply to companies that mine digital assets using their own rented ressources. These companies would also be required to report how much electricity they use and what type of power was tapped. With the implementation of a phased-in excise tax, the US may no longer be a popular mining destination. To mitigate this, it's important to have a globally connected network of mining facilities.

Also the developments in Kazakhstan’s cryptocurrency mining industry are a testament to the ever-changing regulatory landscape in the crypto mining industry. With the “Mining-Ban” in China, they have emerged a major player in the global mining industry, since to its access to cheap energy sources. In 2022 Kazakhstan’s government introduced new regulations requiring mining companies to obtain licenses and pay additional taxes.

However, the regulation of the mining industry is highly unpredictable as many governments around the world seek to introduce appropriate regulations to control the industry. Nonetheless, experienced mining companies and service providers with a global presence and extensive expertise can quickly respond to these changing regulations and adjust their activities accordingly to ensure a constant and smooth operation for themselves and their clients.

Our ability at Bitkern to quickly adapt to changing regulatory environments enables our clients to minimize interruptions to their cryptocurrency mining operations. A key factor for a miner's long-term success is certainly having a broad international presence, so that a potential regulatory event does not temporarily halt the entire operation. Bitkern offers a wide range of options with over 10 locations across 4 continents.

With our focus on reliability, cost-effectiveness, and flexibility, we are confident that our clients will continue to benefit from our global network of mining facilities for years to come.

References:

• https://gratanet.com/publications/the-legal-regulation-of-cryptocurrency-and-digital-mining-in-kazakhstan
• https://cointelegraph.com/news/venezuela-shuts-down-crypto-mining-facilities-exchanges-amid-corruption-probe
• https://www.coindesk.com/policy/2022/12/19/kazakhstan-tightens-regulation-for-miners-looks-to-develop-broader-crypto-industry/
• https://www.coindesk.com/policy/2023/03/09/us-treasury-department-proposes-30-excise-tax-on-crypto-mining-firms/