The authorities in Abkhazia confiscated thousands of mining machines, closed all large crypto farms, yet failed to put an end to illegal mining operations. The breakaway republic of Georgia is struggling with a power shortage that it blames on underground miners.
The government says 30,000 rigs are still in the hands of miners
In recent years, an increasing number of people in Abkhazia, a partly recognized de facto state in the South Caucasus, have turned to cryptocurrency mining as an alternative source of income. However, the Russian-backed republic’s government targeted the energy-intensive operation as the main reason for the region’s growing electricity deficit.
A temporary ban on mining activities and hardware imports was introduced in 2018 and extended this spring until March 31, 2022. But officials in Sukhumi recently admitted that their efforts to enforce the restrictions across the region had largely been unsuccessful.
At a press conference this week, President Aslan Bzania revealed that the Abkhaz authorities had confiscated 6,000 units of coinage equipment currently stored in a “special warehouse”. Citing Sputnik Abkhazia, he noted that almost all large crypto farms were closed. However, the government estimates that around 30,000 mining rigs are still in the hands of people who base their businesses around the currently illegal activity.
Energy engineer Pavel Maksimov told Sputnik that the main reasons for not properly implementing the ban on cryptocurrency mining related to the difficulties in exercising control over unauthorized miners. Maksimov explained that the inspectors are rarely able to contact them, and therefore they are often dragged into conflicts. He also warned that when connected to the electricity grid illegally, the operators of underground farms have no legal or financial protection.
The campaign against cryptocurrency mining continues in Abkhazia
Recently, members of the Central Government, local authorities and representatives of the Electricity Utility of the Republic met to discuss these issues at the request of President Bzania. During the meeting in Sukhumi, officials concluded that their attack on illegal cryptocurrency mining did not fundamentally change the situation in Abkhazia.
Akhra Gagulia, head of the Gudauta branch of the state-owned electricity distribution company in the region, Chernomorenergo, announced that joint raids with law enforcement agencies would continue, but stressed that the task required a lot of work and constant monitoring. He also warned that efforts to prevent illegal connections to the network’s mining facilities are endless.
Earlier this year, reports emerged that Abkhazia was in talks with Russia to solve the electricity shortage. Economy Minister Kristina Ozcan said at the time that the Abkhaz authorities planned to organize additional supplies from the Russian Federation and even set up facilities where miners could install their equipment because the government wanted to legally connect crypto farms to the network.
Do you think Abkhazia can turn into a mining friendly destination if it overcomes its energy deficit? Share your thoughts in the comments section below.
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