Bitcoin Mining Rigs Are Pouring into Abkhazia…Where Mining Is Illegal

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023 06:54 EDT

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Illicit crypto mining appears to be booming in the South Caucasus region, with Abkhazia where crypto rigs are reportedly flooding over the border – despite the fact that mining is officially illegal under Abkhazian law.

The largely unrecognized Republic of Abkhazia in the South Caucasus is recognized by most countries as an autonomous republic of Georgia. Per Nuzhnaya Gazeta, a whopping 83 consignments of crypto mining hardware worth USD 589,290 have crossed the Abkhazia-Russia border checkpoint at Psou in the past six months.

Although laws introduced in 2018 prohibit crypto mining on Abkhazian soil, importing crypto mining rigs is permissible. However, importers must pay customs duties of 1% of rigs’ worth and VAT of 10% when importing mining rigs. Customs officials said they have collected over USD 84,100 in taxes from mining rig imports so far this year.

The same media outlet called the situation “absurd” – and said that authorities often need to begin hunting for illegal crypto miners right after rigs are brought into the country.

The outlet quotes the head of the nation’s customs service, Guram Inapshba, as stating that they “start looking” for rigs and their users straight after approving their import.

The customs chief stated that would be “quite simple to resolve the issue.” By prohibiting the import of crypto mining equipment, he said, authorities could ensure that “not a single [mining rig] would be brought into Abkhazia.”

Per state-owned energy provider Chernomorenergo, electricity tariffs in Abkhazia are around 0.7 US cents per kWh for households, while industries pay a rate of 1.30 US cents per kWh.
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This article has been corrected at 08:10 UTC: the electricity price is in US cents, not USD.