- Canaan has halved its hashrate.
- This follows the shutdown of the firm’s centers in Kazakhstan.
- The counterparty is forced to do so due to regulatory restrictions.
In July 2023, bitcoin miner Canaan cut its production capacity in Kazakhstan by 2 EH/s. The company attributed its decision to regulatory requirements.
Reminder, the Digital Assets Act has been in effect since April 1, 2023. It regulates not only the circulation of cryptocurrencies, but also the sphere of mining.
In particular, the bill introduces mandatory registration of companies mining cryptoassets, as well as accreditation of pools. The permit is issued for a period of three years.
Canaan said the company has filed the paperwork and is undergoing the registration process. However, a miner is not allowed to operate before it receives a license.
The firm expects the process to drag on until the end of the third quarter of 2023. At the same time, the specified capacity is half of the total hashrate of the counterparty.
Canaan launched its “farms” in Kazakhstan in June 2021. By the end of the year, more than 10,000 ASICs had been installed at the firm’s facilities.
As of this writing, Canaan’s stock is trading at $2.1, according to Yahoo Finance data. Quotes fell more than 9% overnight:
Canaan share price on Nasdaq
New hub for “farmers”?
Kazakhstan attracted a slew of mining companies after China banned cryptocurrency in 2021. However, already in the second half of the year, the country faced a power shortage.
This led to an exodus of contractors. To solve the problem, Kazakh authorities even considered building a nuclear power plant.
In January 2022, market participants faced frequent and prolonged power outages. Despite this, in the fall of 2022, the country ranked third in the world in terms of the number of miners.