The Ministry of Economy of Kyrgyzstan seems to be exploring two possible options to implement taxes on cryptocurrency mining. The first option would be the taxation of income, while the second would be taxing expenses incurred during cryptocurrency mining.
On Aug. 28, the Ministry of Economy of Kyrgyzstan has submitted the draft law “On Amending the Tax Code” with the aim of introducing cryptocurrency mining taxation.
According to news outlet Kabar, the draft law was specifically developed to allow for the possible taxation of crypto mining.
New tax proposal
The taxation on cryptocurrency mining is expected to increase budget revenues and to contribute to the principle of fair taxation in the Kyrgyz Republic.
The report suggests that the Kyrgyz government stands to earn some 300 million som ($4.2 million) – significant in a country whose annual budget stands at around $1 billion.
Kyrgyzstan explicitly banned cryptocurrencies back in July 2014
As Cointelegraph previously reported, Kyrgyzstan explicitly banned cryptocurrencies back in July 2014, followed by the National Bank of the Kyrgyz Republic issuing a statement warning that the use of Bitcoin and other virtual currencies as a form of payment is illegal under the national law.
Despite the ban on cryptocurrencies, the Kyrgyz Republic has now around 80 thousand technical devices that allow for cryptocurrency mining.
Layer1 Secures $50M from Peter Thiel, Others to Mine Crypto in Texas
Cryptocurrency investment and infrastructure platform Layer1 has secured $50 million from a number of industry stakeholders in a Series A funding round.
As Fortune reported on Oct. 15, venture capitalist and PayPal co-founder Peter Thiel, early-stage investor Shasta Ventures, along with other industry players committed $50 million to Layer1, which plans to build a wind-powered Bitcoin mining facility in West Texas. Layer1 is reportedly planning to vertically integrate its mining operation in the United States.
The place nobody has taken advantage of yet
Commenting on the development, Layer1 co-founder Alexander Liegl pointed out competitive power prices in Texas, further noting that nobody in the mining industry has taken advantage of them, primarily due to the appropriate cooling technology. Liegl continued:
“We expect our chips to be competitive for at least eight years now. You want to have your own chips in hand. We also have our own electricity substations: effectively that’s as close you can get to owning your own power plant.”
Now that the company has raised substantial funds, it intends to allocate them for building of its own power substations and crypto mining machine infrastructure. As part of its plans, Layer1 has also entered a partnership with Chinese semiconductor company to produce its mining chips.
In late December 2018, Layer1 concluded a $2.1 million seed funding round backed by Thiel, crypto-focused venture capital company Digital Currency Group, and American investor and Protégé Partners founder Jeffrey Tarrant, among others. At the time, the company aimed to direct the raised funds to the further development of programmable money and store-of-value applications.
Recent mining developments in the U.S.
Earlier in October, news broke that Chinese crypto mining giant Canaan Creative filed a $200 million initial public offering request with the U.S. regulators in July, will issue 1.26 billion shares which will be closed on Oct. 20. Canaan is one of the three major Chinese crypto mining companies alongside Bitmain and Yibang International.
In the meantime, BCause Mining, a Bitcoin mining operation in Virginia Beach in the U.S., was recently ordered to liquidate its assets and lay off its 27 full-time and four part-time workers.