Implementation Guide

A Regulator-Grade Guidance Document for Countries Without Existing Mining Frameworks

Date: June 4, 2026 Classification: Implementation Guidance for Government Regulators — Part of the Regulatory Guidance Framework

Scope note. This guide distils implementation lessons from the platform's full set of 27 tracked jurisdictions and regional aggregates spanning five regions: Americas (United States, Argentina, Brazil, Canada, El Salvador, Paraguay, Venezuela), Asia-Pacific (Australia, Bhutan, China, India, Japan, Kazakhstan, Singapore, the Southeast Asia aggregate, Uzbekistan), Europe (European Union, France, Georgia, Germany, the Nordic Countries aggregate, Russia, United Kingdom), and the Middle East & Africa (the Africa (Emerging) aggregate, Saudi Arabia, South Africa, UAE). Figures for hashrate and energy consumption are industry-reported unless attributed to a named regulator or government source, and are flagged accordingly throughout.

TABLE OF CONTENTS

1. Institutional Design -- Who Regulates Mining?
2. Phased Implementation -- How Countries Built Their Frameworks
3. Stakeholder Consultation
4. Enforcement Infrastructure
5. International Cooperation Frameworks
6. Common Implementation Mistakes
7. Recommended Implementation Roadmap

1. INSTITUTIONAL DESIGN -- WHO REGULATES MINING?

No single institutional model dominates global crypto mining regulation. Across the 27 jurisdictions studied, responsibility has been assigned to central banks, securities regulators, energy regulators, dedicated authorities, financial intelligence units, or multi-agency coalitions. Each model has proven strengths and documented weaknesses.

1a. Central Bank Model

Bhutan -- Royal Monetary Authority (RMA)

Bhutan represents the most aggressive central-bank-led approach, where the RMA not only regulates but the state itself operates mining through its sovereign investment arm, Druk Holding & Investments (DHI). The RMA issued the "Cryptocurrency Mining Regulatory Sandbox Framework" in 2019 and, in April 2025, issued a formal notice restricting crypto mining and exchanges to entities registered within the Gelephu Mindfulness City (GMC). Bhutan has reportedly mined over 13,000 BTC since 2019 using monsoon-season hydropower surpluses (industry/operator-reported).

Crucially, the sovereign-holdings picture has shifted from accumulation to treasury management: industry tracking (Arkham/CoinDesk) put Bhutan's holdings at roughly 3,100–5,400 BTC across early–mid 2026 — down sharply from a late-2024 peak after roughly 70% of the stack was sold over 18 months, with no significant mining inflow detected for over a year (suggesting state mining may be paused). Earlier claims of a static ~12,000 BTC "third-largest sovereign holder" stack no longer reflect current data.

What worked: Centralized authority enabled rapid, coherent decision-making. The sandbox approach allowed learning before full regulation. Integration with cheap hydropower created an initially sustainable economic model.

What didn't work: The model is highly centralized and dependent on a small number of state actors. It limits private-sector participation (now confined to GMC) and is not easily replicable in larger, diversified economies. The 2025–2026 drawdown shows that a sovereign-mining treasury is exposed to market-timing and liquidity decisions that a diversified industry would not concentrate in one actor.

Brazil -- Banco Central do Brasil (BCB)

Brazil designated the BCB as the primary crypto regulator following Law No. 14,478/2022. The BCB oversees VASP licensing, AML/CTF compliance, and operational standards via Resolutions 519, 520, and 521 (effective February 2, 2026), with a 270-day authorization window ending October 30, 2026. The securities regulator (CVM) retains oversight of securities-like tokens. Mining itself is not directly regulated by the BCB VASP resolutions; only custody/intermediation operators fall under authorization.

What worked: The BCB brought institutional credibility and existing financial-supervision infrastructure. Phased implementation (law in 2022, BCB authority in 2023, operational rules in 2025, effect in 2026) allowed industry preparation time. A 0% import duty for high-efficiency SHA-256 miners (Resolução GECEX 861, Feb 2026) signals a pro-investment posture.

What didn't work: The multi-year gap between legislation and operational rules (2022–2026) created prolonged regulatory uncertainty, and escalating electricity-theft enforcement (São Paulo seized ~1,400 rigs, ~2 GWh stolen, May 2026) shows financial-sector supervision alone does not address grid-side abuse.

Sources:

• Bhutan RMA Crypto Regulations
• Bhutan Bitcoin Holdings - FinTax
• Bhutan Green Bitcoin Economy
• Brazil Crypto Framework - Chainalysis
• Brazil Law 14,478 - Library of Congress

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1b. Securities Regulator Model

Nigeria -- Securities and Exchange Commission (SEC)

Nigeria's Investments and Securities Act (ISA) 2025, enacted on March 31, 2025, officially recognizes and regulates digital assets, with virtual assets falling under the legal definition of securities and SEC licensing therefore mandatory. All crypto exchanges must be incorporated in Nigeria, licensed by the SEC, and comply with AML/KYC obligations; mining-as-a-service operations must be licensed. Capital requirements are steep: at least NGN 500 million ($335,000) in paid-up capital, with total startup costs typically exceeding NGN 1 billion ($670,000). Mining income is taxed at up to 30% as business income under the National Taxation Act Amendment (NTAA) 2025, and NTAA non-compliance penalties start at NGN 10M for the first month plus NGN 1M each subsequent month (commentary-reported). As of late 2024, only two companies held provisional licenses.

What worked: Classification under the securities framework brought immediate investor-protection mechanisms and a well-understood compliance model. The SEC's provisional licensing (Busha and Quidax in late 2024) allowed a measured market opening.

What didn't work: High capital requirements effectively exclude small-scale miners and create barriers to entry. Treating all mining activity as securities-related may be an overclassification for pure proof-of-work operations.

Sources:

• Nigeria SEC Crypto Regulation - Coinpedia
• Nigeria Crypto Mining Legal Rules 2026
• Nigeria ISA 2025 - Chambers
• IMF Nigeria Crypto Market Report

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1c. Energy Regulator Model

Texas -- Public Utility Commission of Texas (PUCT)

Texas regulates crypto mining primarily through its energy grid infrastructure. The PUCT rule requires mining facilities connected to the ERCOT grid to register if they have total load exceeding 75 MW with at least 10% classified as interruptible. Facilities report anticipated peak load and prior-year actual consumption; non-compliance carries penalties of up to $25,000 per violation per day. At the federal level, FERC's large-load interconnection rulemaking (RM26-4-000, covering >20 MW loads including crypto mining) is pending, with an action target of end-June 2026.

What worked: Energy-centric regulation directly addresses the primary externality of mining (electricity consumption). Interruptible-load programs turn miners into de facto demand-response resources, stabilizing the grid during peak events. A consolidated CRS estimate (R48914, April 2026) puts US mining at roughly 70 TWh bottom-up (~2.3% of 2023 US demand), grounding the policy debate in measured figures.

What didn't work: Narrow focus on energy misses AML/CTF, investor protection, and taxation dimensions, requiring coordination with other agencies for comprehensive regulation.

Paraguay -- ANDE (National Electricity Administration)

ANDE is central to Paraguay's mining regulation given the country's reliance on Itaipú and Yacyretá hydropower. After 2024 tariff increases, ANDE's GCIE category for miners now runs roughly $0.051→$0.06/kWh (up from a ~$0.033/kWh base), with an 8% network-loss charge and a three-month energy-cost deposit ($4.5M for 40 MW), and contracts facing a December 31, 2027 expiration cliff. ANDE earns approximately $12 million per month from mining (ANDE-reported). Miners first register with the Ministry of Industry and Commerce (MIC), then with SEPRELAD as "Obligated Subjects," and DNIT Resolution 47/26 (in force 2026) requires wallet-level reporting of crypto transactions above $5,000/year, explicitly covering mining. Industry estimates put Paraguay at ~4.3% of global Bitcoin hashrate (~43 EH/s) in Q2 2026 (Hashrate Index).

The market is now bifurcating: Bitfarms completed its Latin America exit in January 2026, selling its final Paso Pe site to the Sympatheia Power Fund for up to $30M, while HIVE Digital scaled to ~18.87 EH/s / 400 MW. In March 2026, ANDE signed an MOU with Morphware for state-run mining using ~1,500 of ~30,000 seized rigs powered by surplus Itaipú hydro.

What worked: Direct control of the electricity supply gives the regulator immediate enforcement leverage — non-compliant miners can be physically disconnected.

What didn't work: Energy-only regulation left AML/CTF gaps that required separate SEPRELAD oversight. Massive illegal mining (over 10,000 ASICs seized in 2024; illegal use ~28.5% of national consumption, ~$60M/yr stolen) shows energy regulation alone cannot prevent illicit activity, and rising tariffs plus the 2027 contract cliff are now pushing mid-market operators out.

British Columbia -- BC Energy Statutes Amendment Act

British Columbia took the most extreme energy-regulator approach: on October 20, 2025 it moved to permanently ban new crypto-mining grid connections to BC Hydro via the Energy Statutes Amendment Act, hardening a temporary 2022 moratorium into an indefinite prohibition. Quebec, by contrast, uses punitive pricing (Rate CB rose to 18.078¢/kWh on April 1, 2026, with an ~19.5¢/kWh average proposed for H2 2026) plus a capacity-allocation suspension in place since January 2023. The rationale across both provinces is protecting clean energy for electrification and keeping residential rates low.

What worked: Clear, simple policy that eliminated regulatory ambiguity and protected strategic energy resources for climate goals.

What didn't work: Total prohibition forfeits all potential economic benefits (jobs, tax revenue, demand response). It is not a viable model for countries seeking to develop a mining sector.

Sources:

• Texas PUCT Crypto Mining Registration - Texas Tribune
• PUCT Crypto Mining Rules - DCD
• Texas Grid Reliability - Power Magazine
• Paraguay Bitcoin Mining Guide
• Paraguay Energy Losses - Invezz
• BC Crypto Mining Ban - CoinDesk
• BC Mining Policy - Province of BC

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1d. Dedicated Crypto Authority Model

Dubai -- Virtual Assets Regulatory Authority (VARA)

VARA was established in March 2022 under Dubai Law No. (4) of 2022 as the world's first standalone, specialist virtual-assets regulator, with jurisdiction over all VASPs in the Emirate of Dubai (excluding DIFC). By February 2023 it issued its comprehensive Virtual Assets and Related Activities Regulations 2023, supported by compulsory and activity-specific rulebooks. As of 2026, VARA fully implemented the Travel Rule (Feb 2026) and its Exchange Services Rulebook v2.1 (in force March 31, 2026) permits exchange-traded virtual-asset derivatives. Mining is not a named VARA financial activity — self-mining and B2B hosting typically need only a commercial licence (e.g. via the DMCC Crypto Centre) — but selling mined output commercially can trigger VASP licensing. In April 2026 a new federal layer took effect: the Capital Markets Authority (CMA, which replaced the SCA on January 1, 2026) issued Decision No. 4/R.M/2026 expanding federal VASP activities to eight licensed categories, operating alongside the emirate regimes. The ADGM FSRA separately clarified in Q2 2026 that mining is a licensable commercial activity, not a regulated financial service.

What worked: Specialized expertise and a focused mandate enabled rapid, coherent rulemaking. VARA became a globally recognized model regulator within three years and attracted significant industry investment.

What didn't work: Expensive to establish and sustain; requires a jurisdiction with sufficient political will and resources. Overlapping VARA, DIFC/DFSA, ADGM/FSRA, and now federal CMA regimes created jurisdictional complexity.

Kazakhstan -- AIFC (Astana International Financial Centre) and the 2025 national regime

Kazakhstan initially centralized all crypto-mining licensing through the AIFC from 2023. Miners joined state-approved Digital Mining Pools, obtained three-year licenses, and — under requirements that rose to 75% in 2025 (from 50% in 2024) — sold a mandated share of mined assets through AIFC-licensed exchanges. By early 2026, 84 licenses had been issued covering approximately 415,000 registered machines (industry/government-reported).

In November 2025, Law No. 231-VIII (signed by President Tokayev, in force ~mid-January 2026) overhauled the regime: it legalised mining and crypto circulation nationwide beyond the AIFC, repealed the mandatory domestic-sales quota entirely (former Art. 8(4)), and reclassified mining as a distinct economic activity from digital-asset turnover. Only Kazakhstan-registered individuals/legal entities may mine (a localisation rule), and a digital-mining electricity fee applies (2 tenge/kWh standard; 1 tenge/kWh for renewables/off-grid; 25 tenge/kWh penalty for unmetered use).

What worked: The initial concentrated AIFC approach let the government build regulatory expertise before broader legalisation; the 2025 reform then removed the most distortive constraint (forced sales) while keeping a predictable energy levy.

What didn't work: The AIFC-only, forced-sale model pushed activity underground and drove miners elsewhere — the government effectively conceded this by repealing the quota and opening mining nationwide.

Sources:

• VARA Official Website
• Chainalysis Interview with VARA
• VARA Law No. 4 of 2022
• VARA Regulations - Mayer Brown
• Kazakhstan AIFC Licensing - Gofaizen & Sherle
• Kazakhstan Digital Assets Law - Library of Congress
• Kazakhstan Lifts Restrictions - Caspian News
• Kazakhstan Mining Requirements

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1e. Multi-Agency Model

United States

The US represents the most complex multi-agency approach, with overlapping jurisdictions across:

By 2026 the federal posture had loosened markedly: SEC staff confirmed that proof-of-work mining is not a securities activity (March 2025), a January 2025 executive order affirmed the "right to mine," and the CLARITY Act (H.R.3633) — which frames mining and staking as "administrative or ministerial" — cleared the House in July 2025 and advanced through Senate Banking 15–9 in May 2026. FinCEN does not require MSB registration for mining-for-own-purposes. The EIA's 2024 emergency energy survey of mining companies was blocked after litigation.

What worked: Comprehensive coverage of all dimensions (securities, commodities, AML, tax, energy, environment). Regulatory competition can drive innovation in oversight.

What didn't work: Fragmentation creates compliance burdens, jurisdictional uncertainty, and arbitrage opportunities; firms have long complained of "regulation by enforcement," a posture the DOJ's April 2025 "Ending Regulation by Prosecution" memo began to walk back.

China -- Multi-Agency Prohibition

China represents the multi-agency model taken to its prohibitive extreme. The NDRC and nine other authorities banned mining in September 2021, and in November 2025 the PBoC and top financial, judicial, and cybersecurity agencies reaffirmed that all crypto activity (including stablecoins) is illegal financial activity. On February 6, 2026, an eight-agency joint notice ("Ban 2.0") extended controls to OTC trading, offshore yuan-pegged stablecoins, and RWA tokenization. Despite this, China re-emerged as a top-three mining hub at an industry-reported ~14% of global Bitcoin hashrate (Hashrate Index/Luxor ~14%; CryptoQuant 15–20%) — a methodology-caveated estimate based on geolocation/pool-IP data, not a precise figure — concentrated in Xinjiang and Sichuan.

What worked: Demonstrates the maximum enforcement capability a multi-agency model can deploy.

What didn't work: Even multi-agency coordination with extensive electricity monitoring and IP surveillance cannot eliminate mining; persistent underground operations (~14%, industry-reported) undermine the rule of law, and zero tolerance forfeits all economic benefits.

Sources:

• US Crypto Regulation Guide - Sumsub
• SEC-CFTC Project Crypto
• EIA Crypto Mining Data Collection
• EIA Crypto Energy Survey - Earthjustice
• China NDRC Mining Restrictions - Library of Congress
• China Crypto Crackdown

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1f. Financial Intelligence Unit Model

Paraguay -- SEPRELAD

Paraguay's Secretariat for the Prevention of Money Laundering (SEPRELAD) handles the AML/CTF dimension of mining regulation while ANDE manages energy and MIC handles business registration. Miners are classified as "Obligated Subjects" (Resolution 8/2020, GAFILAT-aligned). SEPRELAD entered a landmark bilateral MOU with

El Salvador's CNAD (March 7, 2025) to coordinate cross-border VASP monitoring.

What worked: Leverages existing AML expertise and international FATF relationships, integrating crypto into established financial-crime-prevention frameworks.

What didn't work: FIUs lack the technical expertise to evaluate energy, environmental, or operational aspects of mining. The FIU model works only as one component of a multi-agency framework, not as a standalone regulator.

Sources:

• Paraguay Crypto Regulation - Altra Legal
• Paraguay Mining Registration

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Comparative Assessment: Which Model Is Most Effective?

Recommendation for new regulators: A hybrid model combining an energy regulator (lead operational authority) with the financial intelligence unit (AML/CTF) and the securities/financial regulator (licensing and investor protection) offers the best balance. This avoids the cost of creating a new agency while covering the three core dimensions: energy governance, financial crime prevention, and market integrity. The lead agency should be whichever institution has the strongest existing capacity and political mandate.

2. PHASED IMPLEMENTATION -- HOW COUNTRIES BUILT THEIR FRAMEWORKS

2a.

Kazakhstan -- From No Regulation to Licensed Mining (2020-2026)

Kazakhstan provides the most complete case study of a country that went through boom, crisis, overcorrection, and reform.

Key lesson: Kazakhstan's experience shows the danger of under-regulation (2020–2021) followed by overcorrection (2023–2024) followed by necessary liberalization (2025). Note specifically that the forced-sale quota peaked at 75% before being repealed outright — countries starting from zero should aim directly for the balanced endpoint and avoid forced-conversion mandates entirely.

Sources:

• Kazakhstan Digital Assets Law - Morgan Lewis
• Kazakhstan Mining Boom and Bust - MIT Technology Review
• Kazakhstan Restrictions - Rest of World
• Kazakhstan 2025 Reforms - Caspian News
• Kazakhstan New Regulations - Chambers

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2b.

UAE/VARA -- Building a Dedicated Authority (2022-2026)

Dubai's VARA represents the fastest build-out of a dedicated crypto regulatory authority, now operating alongside a new federal layer.

Licensing process: VARA implemented a two-stage procedure — (1) Approval to Incorporate (initial conditional approval) and (2) Full VASP License (compliance verification, system testing, operational-substance confirmation) — typically spanning 6–12 months.

Key lesson: VARA succeeded because it was purpose-built with a clear mandate, adequate resources, and political backing. The sequential approach — law first, then authority, then detailed regulations, then licensing — provided clarity at each stage. The later federal CMA layer is a reminder that even a successful dedicated authority can be overlaid by national regulation that regulators must keep coherent.

Sources:

• VARA Licensing Framework - Middle East Briefing
• VARA Regulations - CMS
• VARA Regulatory Framework - Deloitte
• UAE Crypto Regulation - DLA Piper

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2c.

Russia -- 2024 Legalization Sequence and Its Compliance Gap

Russia legalized through sequential legislation signed in rapid succession, then spent 2025–2026 chasing compliance.

Registration requirements: Legal entities and individual entrepreneurs must register with the FTS. Individuals may mine without registration if consumption stays below 6,000 kWh/month; above that they must register as a business. Mined coins are valued at market price when the reward enters the wallet.

Compliance reality: Only ~30% of miners had registered by mid-2025, even as the FTS's AI energy-monitoring count showed active mining farms growing ~44% in 2025 to ~196,900 (industry/state-reported, methodology not independently audited). Enforcement tightened — BitRiver founder Igor Runets was placed under house arrest (Jan 2026) on tax-evasion charges — while proposed (not enacted) Criminal Code amendments would add fines and forced labor for organized illegal mining.

Key lesson: Rapid legislative action can be undermined by low compliance if enforcement infrastructure lags. Russia legalized quickly but still struggles with the "last mile," and its seasonal Siberian bans show energy-shortage carve-outs are an ongoing, time-bounded tool rather than a one-time decision.

Sources:

• Russia Mining Legalization - CoinDesk
• Putin Signs Mining Law - Bitcoin Magazine
• Russia Mining Law - TASS
• Russia 30% Registered - Cointelegraph
• Russia Mining Registry Launch
• Russia Crypto Compliance - Lightspark

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2d. Kenya -- 2025 VASP Act Sequencing

Kenya (tracked within the Africa (Emerging) aggregate alongside Nigeria and Ethiopia) followed a deliberate, IMF-assisted pathway from opposition to regulation.

Regulatory split: CBK has jurisdiction over wallet providers, payment processors, and stablecoin issuers; the Capital Markets Authority (CMA) oversees exchanges, brokers, advisors, fund managers, and tokenization platforms. Kenya is a VASP regime rather than a dedicated mining framework. A 10% excise duty applies to VASP fees (replacing the earlier 3% digital-asset tax).

Market context: Between July 2024 and June 2025, Kenya received approximately $19 billion in cryptocurrency inflows (Chainalysis), with over 6 million users.

Key lesson: Kenya's process — technical assistance first, legislation second, implementing regulations third, with meaningful consultation at each stage — is a methodical model for developing countries. IMF involvement lent credibility and ensured alignment with international standards.

Sources:

• Kenya VASP Act Commencement - CBK
• Kenya VASP Act - EY Tax News
• Kenya VASP Act - ENS Africa
• Kenya Draft Regulations Consultation - TechCabal
• Kenya Crypto Regulation Consultation - Fintech News Africa
• Kenya IMF Technical Assistance

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2e.

Brazil -- 2022 Law to 2026 Implementation

Brazil demonstrates the longest deliberate phased implementation.

Tiered capital requirements: R$10.8 million to R$37.2 million (~$1.8M–$6.2M) depending on operational risk category, with AML/CTF, cybersecurity, smart-contract risk, and incident-response requirements.

Key lesson: Brazil's multi-year implementation produced a comprehensive, well-consulted framework, but the long uncertainty window allowed unregulated market growth — and mining itself remains outside the VASP perimeter, leaving electricity-theft enforcement to the police rather than the financial regulator.

Sources:

• Brazil Crypto Laws 2026 - Global Legal Insights
• Brazil Crypto Framework - Chainalysis
• Brazil IBA Legal Framework
• Brazil New Crypto Law - Library of Congress
• Brazil Crypto Regulation - Conduit

3. STAKEHOLDER CONSULTATION

Effective consultation processes share common features: they are structured, time-bound, multi-stakeholder, and iterative. The cases below — India, the UK, Kenya, plus the EU's MiCA transition — span advanced and developing economies.

3a.

India -- Discussion-Paper Approach (and Its Repeated Deferral)

India's Department of Economic Affairs (DEA) prepared a crypto policy discussion paper structured as a neutral consultative document:

Paper structure:

• Built on inputs from the IMF/FSB joint report on crypto-asset policy
• Covered investor protection, AML measures, tax implications, and legal classification
• Special focus on stablecoins and their potential to reduce India's remittance-fee burden
• Examined classification options (treating Bitcoin, stablecoins, and altcoins separately)
• Referenced US and G20 frameworks as comparators

Consultation process:

• Designed as the first of 2–3 iterative versions, deliberately neutral, inviting feedback from ministries, RBI, SEBI, industry, and the public
• Repeatedly deferred: as of April 2026 the comprehensive discussion paper had reportedly been shelved again — at least the fifth deferral since July 2024, attributed to RBI resistance — while the Lok Sabha Standing Committee on Finance heard industry stakeholders in May 2026 with no recommendations published

Regulatory disagreement surfaced: RBI expressed concern about stablecoins, while SEBI favored a multi-regulator approach. India's experience is a cautionary one: a neutral paper is valuable, but indefinite deferral leaves a punitive tax regime (30% flat + 1% TDS) in place by default.

Sources:

• India Crypto Paper - Business Standard
• India Crypto Paper Stablecoins Focus
• India Crypto Rules - CoinDCX
• India Crypto Paper - CoinEdition

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3b.

UK FCA -- December 2025 Consultation Trilogy

The UK Financial Conduct Authority released three consultation papers on December 16, 2025, one of the most structured consultation processes globally.

Legislative basis: The FSMA 2000 (Cryptoassets) Regulations were passed February 4, 2026, with full commencement targeted for October 25, 2027 and earlier provisions allowing the FCA and PRA to make rules and prepare. Notably, the FSMA regime — and the April 2026 CP26/13 perimeter-guidance consultation — make no mention of mining, which remains outside the FCA perimeter.

Consultation process:

• Papers published December 16, 2025; response deadline February 12, 2026 (8 weeks)
• Target respondents: prospective firms, industry/trade bodies, auditors, advisers, consumer-advocacy organizations
• Phased implementation through October 2027

Key lesson: Three simultaneous but distinct papers allow granular, expert feedback, and a ~2-year lead time provides planning certainty — but the UK case also shows how a comprehensive consultation can leave a deliberate gap (mining is freely permitted yet unaddressed).

Sources:

• FCA CP25/40
• FCA CP25/41
• UK Crypto Framework - Skadden
• UK Crypto Roadmap - DLA Piper
• FCA Crypto Consultation - Latham & Watkins

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3c. Kenya -- March-April 2026 Public Consultation

Kenya's consultation represents a developing-country model.

Process:

• National Treasury published notice (MyGov) on March 17, 2026 opening the Draft VASP Regulations 2026 for comment
• Comment period: March 17 to April 10, 2026, with nationwide public forums from March 30
• Consultation concluded April 10–11, 2026; Treasury is reviewing feedback before gazetting final regulations to make VASP Act 2025 licensing fully enforceable
• 50+ firms (VAAK, formed December 2025) coordinated industry input

Context: This consultation follows the October 2025 VASP Act passage and precedes the November 2026 compliance deadline, addressing licensing terms, supervision mechanisms, and penalties.

Sources:

• Kenya Consultation - TechCabal
• Kenya Consultation - Fintech News Africa

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3d.

European Union -- MiCA Transition and the Rejected PoW Ban

The EU is a useful consultation case at the supranational level. The proposal to ban proof-of-work was rejected by the ECON Committee in March 2022 (30–23), settling the EU on a disclosure-based approach: MiCA Article 19 sustainability disclosures (enhanced above 500,000 kWh) rather than prohibition. MiCA's transitional period ends July 1, 2026 — a hard stop that ESMA reconfirmed in April 2026, adding wind-down and client-migration expectations. By spring 2026 roughly 199–204 CASPs were authorized across ~23 EEA states (top: Germany ~53, Netherlands ~25). The Nordic Countries aggregate sits at the restrictive edge of this consensus (Sweden's electricity-tax pressure, Norway's proposed-but-unenacted PoW-data-centre ban, Iceland's grid-capacity discipline).

Key lesson: The EU shows that a "transparency over prohibition" consensus can survive a defeated ban proposal, but member-state divergence (Nordic restrictions) means a supranational disclosure regime does not by itself create a uniform mining environment.

Sources:

• MiCA Regulation (EU) 2023/1114 - EUR-Lex
• ESMA MiCA Transition Statement

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Consultation Best Practices Summary

Based on the above cases, effective consultation includes:

1. Publication of a neutral discussion paper (India model) to surface issues before proposing rules — but with a firm timeline to avoid indefinite deferral
2. Structured consultation papers with specific questions (UK FCA model) for targeted feedback
3. Multiple rounds (Brazil: two major rounds over two years)
4. Time-bound with clear deadlines (UK: 8 weeks; Kenya: ~24 days with public forums)
5. Industry self-organization encouraged (Kenya: VAAK; India: multiple industry bodies)
6. International technical assistance (Kenya: IMF; India: IMF/FSB frameworks as input)
7. Iterative approach (India: paper described as first of 2–3 versions)
8. Settling the prohibition question explicitly (EU: the rejected PoW ban gave the market certainty that disclosure, not prohibition, was the path)

4. ENFORCEMENT INFRASTRUCTURE

4a.

Paraguay -- Drones and AI Analytics

Paraguay deploys the most technology-intensive enforcement approach among developing countries, driven by the scale of illegal mining (illegal use estimated at ~28.5% of national electricity consumption, ~$60M/yr stolen).

Technology deployed:

• AI-driven detection identifying unauthorized mining through electricity-consumption-pattern and distribution-pattern analysis
• Drones for surveillance of suspected illegal sites
• Automated monitoring of grid anomalies

Enforcement results (2024–2026):

• 17+ raids in 2024; over 10,000 ASICs and ~50 transformers seized; the May 2024 Salto del Guairá bust alone took 2,738 machines
• Up to 10 years' imprisonment for electricity theft (July 2024 law)
• In March 2026, ANDE signed an MOU with Morphware to run state mining using ~1,500 of ~30,000 seized rigs

Sources:

• Paraguay Anti-Mining Enforcement
• Paraguay Miners Seized - Bitcoin.com
• Paraguay Energy Losses - Invezz

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4b.

China -- Electricity Monitoring Technical Mechanism

China's approach to detecting illegal mining relies on sophisticated electrical-grid analysis.

Technical detection methods:

1. Harmonic analysis: ASIC hardware produces unique harmonic signatures on the neutral line, detectable through field measurements by distribution companies.
2. Energy-quality monitoring: Sudden changes in power factor, harmonic distortion, or load profiles flag mining.
3. IP-address screening: Monitoring of connections to mining-pool servers.
4. Self-compliance checks: Local officials run jurisdictional audits.
5. Inter-agency information sharing: Coordinated cross-referencing of electricity data, internet traffic, financial transactions (incl. blockchain forensics on a ~1.182 billion yuan / ~$166M cross-border USDT-laundering case unveiled October 2025), and business registrations.

Limitations: Despite these measures, weak distribution-side monitoring and miners hiding behind smart meters or spreading load across locations defeat detection. China still hosts an industry-reported ~14% of global Bitcoin hashrate (Hashrate Index/Luxor ~14%; CryptoQuant 15–20%) despite comprehensive bans — a methodology-caveated estimate, not a precise figure.

Sources:

• Detection of Illicit Mining Farms - SAGE Journals
• Power Stealing Detection in Bitcoin Mining - ScienceDirect
• China Underground Crypto Mining - CNBC

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4c.

Kazakhstan -- Certified Meters Requirement

Kazakhstan mandates that all licensed miners install automatic, certified electricity metering and purchase power within set tariffs.

Key requirements:

• Certified, tamper-resistant metering devices mandatory for all licensed operations
• If no metering device is installed or it malfunctions, usage is billed at a punitive 25 tenge/kWh unmetered rate (against the 2 tenge/kWh standard digital-mining fee), sharply raising costs
• All metering data feeds a central monitoring system; equipment tracked via IP addresses and equipment IDs
• Regional energy companies disconnect non-compliant miners, having required ~30% power-use reductions during shortages

Sources:

• Kazakhstan Mining Requirements
• Kazakhstan Energy Grid Crisis
• Kazakhstan Tightens Controls

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4d.

United States -- EIA Reporting Framework (Blocked)

The US attempted to build enforcement infrastructure through mandatory data collection.

EIA Emergency Data Collection (2024):

• Targeted 82 cryptocurrency mining companies (~150 facilities)
• Required monthly reporting of energy consumption, average/maximum demand, suppliers, mining-unit counts, and hash rate by location

Outcome: The mandatory survey was blocked following litigation by Texas-based miners. As a fallback, a consolidated CRS report (R48914, April 2026) drew on existing EIA estimates to put US mining at roughly 70 TWh bottom-up (~2.3% of 2023 US demand). The episode shows mandatory miner energy reporting is legally fragile in deregulated, litigious markets — a contrast with utility-mandated metering in state-utility jurisdictions.

Sources:

• EIA Crypto Mining Survey
• EIA Energy Reporting - Earthjustice
• EIA Crypto Mining Tracking

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4e. Militarized and Theft-Focused Enforcement -- Venezuela, Brazil, Malaysia, Georgia

A distinct enforcement mode targets electricity theft and grid protection rather than financial-crime classification, and recurs across several jurisdictions:

• Venezuela: After banning grid mining in May 2024 (reaffirmed May 2026), enforcement is effectively militarized — "Operación Cazador" (May 18, 2026) seized ~4,000 ASICs in Maracay (CICPC + military), and earlier sweeps disconnected mining to recover ~500 MW in critical regions (government-reported).
• Brazil: Police/DEIC raids focus on electricity-theft mining (legal where power is lawfully paid) — São Paulo seized ~1,400 rigs (~2 GWh stolen) in May 2026, with a March 2026 asset-seizure law enabling freezing/liquidation of crime-linked digital assets.
• Malaysia (within the Southeast Asia aggregate): power theft prosecuted under the Electricity Supply Act 1990 via "Ops Steal" inspections; illegal-mining electricity theft estimated at ~RM700M/year (BERNAMA, 2026).
• Georgia: a 2026 Svaneti/Mestia crackdown targets unmetered grid-stealing mining via mass smart-meter rollout and free-electricity thresholds, with state losses estimated at GEL 20–25M/yr.

Key insight: Where mining is legal but power is cheap or subsidized, theft enforcement — not financial supervision — becomes the dominant operational mode. State-owned or vertically integrated utilities (ANDE, Eskom-aligned models, MPPEE, Sarawak Energy) hold a structural advantage because they can meter and disconnect directly.

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4f. Cost of Enforcement Infrastructure

Based on documented country expenditures and indicators:

Key insight: Enforcement costs are dominated by grid-monitoring infrastructure. Countries with state-owned utilities (Paraguay's ANDE, Kazakhstan's regional energy companies, Ethiopia's EEP) have a structural advantage — they can mandate metering and disconnect through existing utility relationships. Deregulated-energy markets (US) face higher coordination costs and, as the blocked EIA survey shows, greater legal exposure.

5. INTERNATIONAL COOPERATION FRAMEWORKS

5a. SEPRELAD-CNAD MOU (March 7, 2025)

The bilateral Memorandum of Understanding between

Paraguay's SEPRELAD and

El Salvador's CNAD is the first dedicated crypto regulatory cooperation agreement between two developing nations.

Coverage:

• Joint monitoring of digital-asset service providers
• Detection and control of unlicensed crypto activity in both jurisdictions
• Information exchange to prevent regulatory arbitrage by VASPs operating in both countries
• Enhanced rules on money laundering, terrorist financing, and WMD-proliferation financing
• Shared blockchain-intelligence tools and risk-analysis methodologies

Strategic significance: El Salvador brings experience as an early Bitcoin-adopting nation, while Paraguay brings mining-related energy-management expertise. Note that El Salvador repealed Bitcoin's legal-tender status on January 29, 2025 (amendment passed 55–2) as a condition of its IMF Extended Fund Facility — so the cooperation is now anchored in a DASP-licensing/AML frame (0% tax LEAD regime) rather than legal-tender status. The MOU addresses VASPs exploiting gaps between neighboring jurisdictions.

This was one of several El Salvador cooperation deals in close succession.

Sources:

• El Salvador-Paraguay Agreement - CoinDesk
• El Salvador Crypto Regulation Agreement - CoinGape
• El Salvador Paraguay Oversight Pact - Invezz

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5b. Other Bilateral and Multilateral Agreements

Sources:

• UK-US Transatlantic Taskforce - Morgan Lewis
• GCC Crypto Regulation - Library of Congress

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5c. FATF Mutual Evaluations and Crypto Mining

The FATF's Targeted Update on Implementation of Standards on Virtual Assets (2025) provides the global compliance benchmark. (These are FATF's global jurisdiction counts, distinct from this guide's set of 27 tracked jurisdictions.)

Global compliance status (March 2025):

• 29% of jurisdictions (40/138) are largely compliant — up from 25% in 2024
• 49% are partially compliant
• 21% are non-compliant (down from 25%)
• 76% (124/163 jurisdictions) have conducted ML/TF risk assessments for VAs/VASPs
• 73% of jurisdictions (85/117) have enacted Travel Rule legislation

Mining-specific assessment: FATF does not directly regulate mining as a standalone category. However, mining pools and mining-as-a-service providers may be classified as VASPs depending on jurisdictional interpretation, subjecting them to Recommendation 15 (registration/licensing, risk assessment, supervision, AML/CTF).

Key gap: Travel Rule implementation remains weak even where enacted — 59% of jurisdictions with Travel Rule legislation (50/85) have yet to take enforcement or supervisory action.

Sources:

• FATF 2025 Targeted Update
• FATF Update Summary - 21 Analytics
• FATF Recommendation 15 - TRM Labs

6. COMMON IMPLEMENTATION MISTAKES

6a.

Venezuela's SUNACRIP -- Corruption and Institutional Collapse

What happened: SUNACRIP, Venezuela's National Superintendency of Crypto Assets, was created to regulate the sector and manage the state-backed Petro. In March 2023 a corruption scandal revealed billions misappropriated through crypto wallets; 80+ people were arrested, including 10+ SUNACRIP staff charged with misappropriating over $3 million (distinct from a broader $3B+ PDVSA scheme).

The Petro failure: Launched in 2018, supposedly backed by oil and gold reserves, the Petro never gained traction. Major exchanges refused to list it; the central bank would not accept it. It was officially shut down by 2024.

Regulatory fallout: SUNACRIP has been in "reorganization" since March 2023. The government banned grid mining (May 2024, reaffirmed May 2026), with militarized raids — "Operación Cazador" (May 18, 2026) seized ~4,000 ASICs — as the operative enforcement mode. A regulatory vacuum persists as of mid-2026, with no operative tax or licensing framework.

Lessons:

1. Regulators must be independent from political manipulation and state commercial interests
2. Government-created cryptocurrencies (Petro) backed by dubious assets destroy institutional credibility
3. Once a regulatory body is compromised, the entire sector suffers — Venezuela went from permissive regulation to near-total prohibition
4. Corruption risk is highest when the regulator also has operational/commercial functions

Sources:

• Venezuela Crypto Mismanagement - Crypto for Innovation
• Venezuela SUNACRIP Reorganization - Cointelegraph
• Venezuela Crypto Compliance - Lightspark
• Venezuela Mining Crackdown - TheMinerMag

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6b.

Paraguay's 2022 Bill Veto -- Ignoring Stakeholder Concerns

What happened: Paraguay's Congress passed a bill regulating crypto mining in May–July 2022. President Mario Abdo Benítez fully vetoed it on August 31, 2022. As of 2026 Paraguay still has no comprehensive mining law, operating instead via piecemeal resolutions and aggressive ANDE enforcement.

Reasons cited:

1. Energy consumption vs. job creation: mining uses massive electricity but creates relatively few jobs
2. ANDE opposition: the bill capped the miner rate above the industrial rate, threatening utility revenue
3. Central Bank concerns: regulating trading "could create a false sense of security"
4. Future energy security: intensifying mining could force electricity imports within four years

Lessons:

1. Key agencies (central bank, energy utility) must be consulted before drafting, not after
2. Energy-impact analysis must be integral to any mining bill
3. Job-creation claims must be realistic — mining is capital-intensive, not labor-intensive
4. A presidential veto after passage wastes institutional time and political capital — and four years on, the resulting governance gap is filled by enforcement rather than law

Sources:

• Paraguay Veto - CoinDesk
• Paraguay Veto Energy Cost - Decrypt
• Paraguay Veto - Cointelegraph

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6c.

Kazakhstan's Overcorrection -- Restrictive Regime Drives Industry Away

What happened: After the January 2022 energy crisis and protests, Kazakhstan imposed increasingly strict rules: AIFC-only licensing, forced sale of mined assets through AIFC exchanges (50% in 2024, rising to 75% in 2025), energy limits, and a per-kWh levy.

Consequences:

• Major mining companies abandoned tens of thousands of machines and relocated (notably to the US)
• Kazakhstan's share of global hashrate dropped sharply from its 2021 peak
• Underground mining persisted, undermining legitimate operators
• By late 2024, regional energy companies were still disconnecting unlicensed operations

Government recognition of error: In November 2025, Law No. 231-VIII removed AIFC exclusivity, repealed the forced-sale quota entirely, and opened mining nationwide.

Lessons:

1. Overcorrection after a crisis pushes activity underground rather than eliminating it
2. Forced-sale requirements through a single exchange create market distortions — Kazakhstan ultimately repealed them
3. Excessively centralized licensing (AIFC-only) creates bottlenecks only large operators can absorb
4. Frameworks must be adaptable — Kazakhstan took ~3 years to recognize and correct its overcorrection

Sources:

• Kazakhstan Mining Boom to Bust - MIT Technology Review
• Kazakhstan Miners Fleeing - Rest of World
• Kazakhstan Hashrate Migration
• Kazakhstan 2025 Liberalization - Caspian News

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6d.

India's Tax Framework -- Punitive by Design

What happened: India introduced a 30% flat tax on crypto gains and a 1% TDS on transactions in 2022 (originally Section 115BBH, now reflected in the Income-tax Act, 2025), with mined tokens taxed at FMV on receipt and a deemed-zero cost of acquisition.

Why it is considered punitive:

• 30% rate with no deductions beyond cost of acquisition (and zero cost basis for mined coins — taxing revenue, not profit)
• No loss offsets across crypto assets or other income categories
• 1% TDS on all transactions, regardless of profit/loss, creating a cash-flow burden
• No distinction by holding period

Measured impact: Industry estimates report a 60–87% drop in trading volume after the 2022 measures, with much activity moving offshore. The framework remained unchanged through Budgets 2023–2026, and the Union Budget 2026-27 retained both the 30% tax and 1% TDS, adding only Section 446 reporting penalties.

Lessons:

1. Tax policy should be proportionate — punitive rates drive activity offshore rather than generating revenue
2. The absence of loss offsetting is particularly damaging in volatile markets
3. TDS on transactions (not just gains) creates disproportionate compliance burden
4. Failure to revise despite clear evidence of capital flight suggests political rather than economic motivations

Sources:

• India Crypto Tax Guide - CoinDCX
• India Crypto Tax - Koinly
• India Crypto Tax Explained - Cryptact
• India Budget 2026 No Change - Nadcab

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6e.

Saudi Arabia's Gray Zone -- The Cost of Inaction

What happened: Saudi Arabia has neither explicitly banned nor licensed crypto mining. The only binding instrument — a 2018 standing-committee warning — addresses trading/dealing, not the computational act of mining. As of June 2026, no mining-specific law, license, or prohibition has been enacted, and a broader VASP framework remains under development (not verified as enacted).

Consequences of the gray zone:

• Legal uncertainty deters legitimate operators while providing no barrier to illicit activity
• No investor protection, AML/CTF, or tax framework specific to mining
• Regulatory arbitrage: crypto businesses establish in neighboring UAE (clear VARA/CMA frameworks) instead — even as private MoUs (WhiteBIT–Durrah AlFodah, Nov 2025; Qareeb–Pantheon ~50 MW GCC colocation, Feb 2025) signal latent commercial interest
• Loss of potential economic benefits

Lessons:

1. Inaction is itself a policy choice with consequences — it does not preserve the status quo
2. Ambiguous prohibition (warned-against but not criminalized) is the worst of both worlds
3. When neighbors have clear frameworks (UAE's VARA/CMA), regulatory vacuums create competitive disadvantage
4. The longer a country waits, the more entrenched unregulated activity becomes

Sources:

• Saudi Arabia Crypto Regulation - Lightspark
• Saudi Arabia Fintech Regulations 2025-2026 - ICLG
• Middle East Crypto Regulation 2026
• Saudi Arabia Crypto Mining Legal Guide

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6f.

El Salvador -- Legal-Tender Reversal Under IMF Conditionality

What happened: El Salvador made Bitcoin legal tender under the 2021 Bitcoin Law and pioneered state geothermal (volcanic) mining via LaGeo, reporting ~474 BTC mined. But under its IMF Extended Fund Facility, it repealed Bitcoin's legal-tender status on January 29, 2025 (amendment passed 55–2) and accepted a condition that the public sector cease BTC accumulation via both purchases and mining.

Why it matters:

• A flagship "Bitcoin nation" narrative proved reversible once it collided with external financing conditionality
• The licensed-DASP regime (LEAD: 0% income tax, 0% VAT, 0% capital-gains) survived, but legal-tender status did not — a reminder that headline adoption and durable framework design are different things
• High tariffs (~$0.20/kWh) and no grid surplus mean El Salvador is "not a competitive mining market" (analyst) at ~1.1 EH/s (industry-reported), independent of the legal-tender question

Lessons:

1. Symbolic measures (legal tender) are vulnerable to fiscal/IMF reality; durable value comes from the tax and AML framework, not the headline
2. State mining ambitions must be stress-tested against external financing constraints before being made central to policy
3. Energy fundamentals (tariff, surplus) govern competitiveness more than legal posture

Sources:

• El Salvador Bitcoin Law Repeal
• El Salvador Geothermal Mining

7. RECOMMENDED IMPLEMENTATION ROADMAP

Based on evidence from all 27 jurisdictions studied above, the following three-year roadmap provides a phased approach for a country starting from zero. The sequencing is informed by what worked in Kenya, Brazil, UAE, and Kazakhstan (post-2025), and what failed in Venezuela, Paraguay (2022), Saudi Arabia, and India (punitive tax).

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YEAR 1: FOUNDATION (Months 1-12)

Objective: Understand the landscape, build institutional capacity, and draft initial legislation.

Q1 (Months 1-3): Assessment and Institutional Designation

Q2 (Months 4-6): Stakeholder Consultation Phase 1

Q3-Q4 (Months 7-12): Legislative Drafting and Consultation Phase 2

Year 1 Milestone: Primary legislation enacted with clear definitions, designated authority, basic licensing framework, and a one-year compliance transition.

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YEAR 2: OPERATIONAL FRAMEWORK (Months 13-24)

Objective: Implement licensing, build enforcement capacity, and begin supervised operations.

Q1-Q2 (Months 13-18): Implementing Regulations and Licensing

Q3-Q4 (Months 19-24): Enforcement and Monitoring

Year 2 Milestone: Licensing operational, first licenses issued, enforcement infrastructure active, registry of legitimate miners established.

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YEAR 3: FULL FRAMEWORK AND OPTIMIZATION (Months 25-36)

Objective: Achieve full compliance, integrate with international frameworks, and optimize based on experience.

Q1-Q2 (Months 25-30): Compliance Deadline and International Integration

Q3-Q4 (Months 31-36): Optimization and Advanced Regulation

Year 3 Milestone: Full compliance achieved, international cooperation active, regime optimized on evidence, demand-response integration operational.

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Key Decision Points

Throughout implementation, regulators face binary decisions that significantly shape outcomes:

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Implementation Risk Matrix

VERIFICATION NOTES

• Source of truth. This refresh mirrors the canonical per-jurisdiction fact matrix (.claude/crypto-mining-fact-matrix.json) as of June 4, 2026, covering all 27 jurisdictions/aggregates across the five canonical regions (Americas, Asia-Pacific, Europe, Middle East & Africa, plus international frameworks referenced where relevant). No facts were introduced beyond the matrix or the prior verified document.
• Industry-reported figures are flagged. Hashrate and energy figures are labeled industry-reported (e.g., China ~14% — Hashrate Index/Luxor; CryptoQuant 15–20%; Paraguay ~4.3% / ~43 EH/s; Bhutan holdings ~3,100–5,400 BTC — Arkham/CoinDesk; US ~70 TWh / ~2.3% — CRS R48914). Where the matrix records "NOT VERIFIED" or "NO DATA FOUND" (e.g., precise Germany/Japan/South Africa hashrate shares, Saudi mining tax), no figure is asserted.
• Facts corrected this refresh: (1) Bhutan holdings updated from a static ~12,000 BTC "third-largest holder" to the 2026 drawdown (~3,100–5,400 BTC, ~70% sold, mining possibly paused). (2) China reframed to the Nov 2025 PBoC reaffirmation + Feb 6, 2026 eight-agency "Ban 2.0" notice, with hashrate stated as industry-reported ~14% (caveated), not a precise "14.05% / ~145 EH/s" figure or a "13-agency Nov 28 2025" meeting. (3) Kazakhstan forced-sale quota corrected to 50% (2024) → 75% (2025), then repealed by Law No. 231-VIII (Nov 2025). (4) Russia updated with ~196,900 active farms (FTS, +44% in 2025), seasonal Buryatia/Zabaikalsky bans (15 Nov 2025–15 Mar 2026), IP-address registry (Decree 556), and persistent ~30% registration. (5) El Salvador Bitcoin legal-tender status corrected to repealed Jan 29, 2025 under IMF conditionality. (6) Paraguay updated with the Bitfarms exit (Jan 2026, Paso Pe to Sympatheia, up to $30M) and HIVE Digital scale-up (~18.87 EH/s / 400 MW), plus the 2027 contract cliff. (7) Venezuela updated to the May 2026 ban reaffirmation and Operación Cazador (~4,000 ASICs).
• Aggregates recomputed for N=27. Statements of scope ("all 27 jurisdictions") and roadmap references reflect the current matrix; FATF global compliance percentages in §5c are FATF's own jurisdiction counts (138/163/117), explicitly distinct from this guide's 27.
• Tags & links. Tag set restricted to the canonical type/guidance. Wikilinks use correct file slugs (notably georgia-country for Georgia, el-salvador, africa-emerging, southeast-asia, nordic-countries, united-kingdom, united-states), and all cross-references use the deep-research/ path prefix. No relative markdown links; no Wikipedia/Reddit/Quora/X/Medium citations.

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Document refreshed June 4, 2026. Mirrors the canonical crypto-mining fact matrix; all figures verified against that source. Intended as guidance for government regulators; not legal advice.