The crypto mining industry has been around for a decade now and is worth billions of dollars. Even though there is a huge demand for crypto mining among enthusiasts, the regulators are often not on the same page. A similar scenario has resulted in illegal crypto-mining activities booming in the Republic of Abkhazia, where miming has been banned.
A report from Nuzhnaya Gazeta revealed that the nation has seen a surge in illegal crypto-mining operations with over 80 consignments worth approximately USD 589,290, crossing the Abkhazia-Russia border checkpoint at Psou over the past six months.
Back in December 2018, regulators in Abkhazia banned all activities related to cryptocurrency mining, stating that the nation’s electrical system wasn’t capable enough to bear the load, citing that it needed to provide “priority power supply to the population of Abkhazia.”
However, the nation continued to allow importing of crypto mining rigs, with importers having to pay 1% of the rigs’ worth in custom duties and a VAT of 10% on every import.
According to customs officials, the largely unrecognized state in the South Caucasus, which is considered by several countries as an “autonomous republic” of Georgia, states that the nation has collected over USD 84,100 in taxes from mining rig imports so far this year.
The head of the nation’s customs service, Guram Inapshba, was quoted saying that authorities “start looking” for the rigs and its users right after their import is approved, in efforts to “hunt” for illegal crypto miners.
However, Inapsbha clarified that no foreign residents are involved in any crypto mining-related activities in the nation, but he noted that there re “several dozen citizens” of Abkhazia involved in the imports.
He further added that some pieces of equipment are also smuggled across the border and in February alone the customs seized 38 units of such equipment.
He emphasized the fact that when these are imported, it is hard to establish if the equipment is for household purposes, office equipment, or whether it is intended for profit.
On this note, he says that it is necessary to completely prohibit the import of mining rigs to ensure that “not a single [mining rig] will go to Abkhazia.”
Electricity and crypto mining
Abkhazia isn’t the only nation that has been cracking down on crypto mining. Earlier this month, Ildemaro Villarroel, the Venezuelan Minister of Habitat and Housing, announced the ban of crypto mining in state-owned housing or neighborhoods that are part of the “Gran Misión Vivienda” project.
Similar to that of Abkhazia, the minister said that the crypto mining industry is harming the nation’s power supply system. However, miners in the nation stated that the blackout the country has been facing wasn’t because of high consumption, and was instead due to failures in the nation’s power grid.