While the Financial Monitoring Agency (FMA) reports 17 criminal cases against illegal miners, documents are publicly available about a somewhat different scheme. For instance, companies with Chinese management consistently buy megawatts of electricity through the official balancing market, while simultaneously accumulating hundreds of millions of tenge in debt. But if all the information is in the public domain, why does the system continue to operate?
Recently, the FBRK reported that since the beginning of 2024, the FMA has registered 17 criminal cases related to illegal mining with damages exceeding 1.3 billion tenge. Most often, illegal farms were found in Astana, Shymkent and Kostanay. Five of them used electricity without proper metering — volumes comparable to the consumption of a large city.
At the same time, legal mining has brought more than 17 billion tenge to the budget over three years, which, according to the state's logic, should confirm the importance of regulating the industry. However, the FBRK editorial team is aware of several companies with Chinese management that have been operating through the official electricity balancing market for several years, but apparently forget to pay for it.
To understand the scale of the situation, it's necessary to understand how the wholesale electricity market in Kazakhstan works. Companies submit a daily application for the volume of electricity for the day after tomorrow to LLP "Settlement and Financial Centre for Support of Renewable Energy Sources" with advance payment. The price is linked to the month before the previous one — so participants can plan their costs. But actual consumption almost never matches the declared amount. If a company consumes less than it ordered, the surplus is automatically sold on the electricity balancing market. If it consumes more, it buys the shortfall there as well.
The balancing market is a platform for real-time transactions where prices are determined by supply and demand. Buying on it is usually more expensive than the bid price, selling is cheaper. The balancing market operator, JSC "Kazakhstan Operator for the Market of Electric Energy and Capacity" (KOREM), does not trade itself, but merely records transactions and carries out netting. Formally, everything happens on a civil law basis. Simply put, companies sort out among themselves who owes whom. The state here acts only as the process administrator.
The system, as intended, was created for conscientious participants — factories, energy supply companies, large industrial enterprises that need flexibility in managing energy consumption. The key feature is that the balancing market operates without prepayment requirements, without bank guarantees, without collateral for new participants. You just need to register a company, gain access to trading, and you can buy electricity with deferred payment. It is this vulnerability that mining companies are apparently exploiting.
The central figure here is Zhang Xiaojia, who is the director and founder of at least three companies: "Bitlion Ltd.", "Falcon Technology Company Ltd." and "Bitcathome Ltd.". All three companies were registered at roughly the same time — in December 2021. All three declare the same type of activity — providing server room facilities (data centres). All three have restrictions and debts.
Let's start with "Bitlion Ltd.". According to data from the kompra.kz service, the company has a tax debt of over 10 million tenge and a debt under enforcement proceedings of 160.8 million tenge. The company has had bank accounts frozen and a ban on notarial actions. The company's court history is no less interesting. In October 2024, the court ruled in favour of JSC "Kazakhstan Electricity Grid Management Company" (KEGOC) to recover a debt from the company "Bitlion Ltd.", as the latter had not paid for electricity. Later, a similar ruling was made in favour of JSC "Kyzylorda Distribution Electricity Grid Company". And in March 2025, the court ordered "Bitlion Ltd." to repay a debt to the balancing market operator itself — JSC "KOREM". In other words, the company bought electricity from the country's largest energy companies and did not pay, and therefore the energy companies were forced to go to court.
If you look closely, in the KOREM netting register for April 2024, a transaction is recorded: creditor — JSC "Kyzylorda Distribution Electricity Grid Company", debtor — private company (PC) "Bitlion Ltd.", amount — 25.2 million tenge excluding VAT.
"Falcon Technology Company Ltd." completely duplicates the scheme of "Bitlion Ltd.": the same director, the same registered address, the same registration date, the same declared type of activity. Falcon Technology's tax debt exceeds 6.6 million tenge, and its debt under enforcement proceedings is 157 million tenge.
The third company, "Bitcathome Ltd.", has a debt under enforcement proceedings of almost 6 million tenge. The total debt under enforcement proceedings alone of Zhang Xiaojia's three companies amounts to more than 323 million tenge. This does not include tax debts, which exceed 16 million tenge. Zhang Xiaojia himself has a debt under enforcement proceedings of over 106 million tenge and is banned from leaving Kazakhstan.
In March and April 2024, just two companies, "Bitlion Ltd." and "Falcon Technology Company Ltd.", bought 8.67 million kilowatt-hours of electricity on the balancing market for a total of 136.8 million tenge including VAT. The imbalance was distributed from JSC "Kazzinc", KEGOC and Kyzylorda Distribution Electricity Grid Company. For comparison: this is the monthly consumption of a small town or a large industrial enterprise. Mining farms consume electricity consistently and in large volumes. The balancing market, designed to cover unpredictable consumption spikes, is essentially unnecessary for them. So why use this particular scheme? The answer is simple: because the balancing market allows you to buy electricity with deferred payment, without prepayment and without guarantees.
The companies do not submit applications in advance to the settlement and financial centre; they buy electricity on the balancing market, where settlements are done after the fact. Formally, this is not a violation of the market rules. Legally, claims can be made, but these are civil law relations between private companies.
The FMA identifies those who consume electricity without proper documentation — these are classic violations that are easy to classify. But companies that buy electricity legally, through the official market, but then fail to meet their financial obligations, are in a different realm. Formally, this is unfair conduct by counterparties. The affected energy companies must deal with them through the courts and enforcement proceedings. However, by the time the court makes a decision, the companies have already accumulated hundreds of millions of tenge in debts. Bank accounts get frozen, but apparently, they have no funds in them. The director cannot leave the country but continues to manage several companies simultaneously. Enforcement proceedings are opened, but the debt is not being repaid. KOREM records transactions, but does it block access for debtors?
How many more similar cases are occurring on the balancing market? If just three companies known to us accrued debt of more than 320 million tenge under enforcement proceedings in a relatively short period, what is the total volume of unfulfilled obligations on the balancing market? The FMA reports that over three years, legal mining brought 17 billion tenge to the budget. But if hundreds of millions of tenge in unfulfilled obligations are being accumulated simultaneously, how complete is the picture we see in the official statistics?
It is possible that part of the damage from the activities of mining companies remains outside the accounting framework because it is formally not classified as illegal mining. This is not theft of electricity, but non-fulfilment of civil law obligations. The state loses out on tax revenue (as evidenced by the companies' tax debts), energy companies suffer financial losses, and the system as a whole faces problems in securing resources.
And when the FMA next reports on the fight against illegal mining and that legal mining has brought 17 billion tenge to the budget, it is worth asking several additional questions. For example, how many companies on the balancing market are accruing debt and on what scale? What measures are being taken to prevent such schemes? Why does the system allow a single individual with a ban on leaving the country and multi-million tenge debts to continue operating through the balancing market?