Abkhazia shut down two crypto mining farms.

Authorities in Abkhazia have closed down two crypto mining farms that were illegally connected to the power grid. The facilities were minting crypto in violation of a mining ban imposed by the government to mitigate electricity shortages. Officials from the local power utility, Chernomorenergo, have confiscated 82 mining units, the distribution company announced on its Facebook page. Over the past few years, crypto mining has become a popular income source in the partially recognized breakaway republic in northwestern Georgia.

Authorities blame the electricity deficit in the territory on crypto mining. 

The government in Sokhumi has blamed the growing electricity deficit in the territory on the energy-intensive activity of crypto mining. In 2018, Abkhazia introduced a “temporary” ban on crypto mining and hardware imports, but officials alleged that miners were responsible for last year’s energy crisis despite the restrictions. This spring, authorities extended the measure until March 2022, introducing fines and criminalizing the illegal use of electrical power. A number of mining operations were shut down. The latest seizures of equipment come after residents of Ochamchira District engaged in cryptocurrency mining gathered to protest the actions of Abkhaz law enforcement last month.

Abkhazia plans to legalize and regulate the expanding crypto mining industry.

The seizure was provoked by several police raids targeting illegal mining facilities in the villages of Aradu and Pakuash, Forklog and Sputnik reported. Local authorities called a meeting with lawmakers and the country’s deputy minister of interior to resolve the conflict. Since then, the government of Abkhazia has started negotiations with Russia for additional power supplies to satisfy its growing needs, including those of cryptocurrency miners. The autonomous republic, recognized and backed by the Russian Federation, also plans to legalize and regulate the expanding crypto mining industry.