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Abkhazia, a “partially recognised state in the South Caucasus,” has long been common among many in the cryptocurrency community, especially miners. However, it appears that these feelings may be coming to an end.
The problem of toughening obligations for cryptocurrency mining operations was debated during a parliamentary meeting on March 31st. Later, the deputies present voted to change the Republic of Abkhazia’s Code of Administrative Offenses.
On March 31, the de-facto Ministry of Internal Affairs of the Russian-occupied Georgian territory of Abkhazia announced a bill to change the Code of Administrative Offenses. In line with this, the government has prolonged the prohibition on cryptocurrency mining operations until March 31, 2022. Unsurprisingly, the aforementioned ban occurred in the midst of a severe electricity shortage in the area, which Bitcoin miners were blamed for.
As per the newly adopted regulations, different penalties including jail time have been incorporated, depending on the degree of the offense. For instance, according to tweets by local media,
“Connecting to power grids for the purpose of cryptocurrency mining on large scale will be punishable by imprisonment for 1 to 3 years.”
“The same act committed by a person using his official position is punishable by imprisonment for a term of one to three years, with or without the deprivation of the right to hold certain positions or engage in certain activities for a term of one to two years.”
Many native crypto-enthusiasts have, understandably, voiced their dissatisfaction with this prohibition. According to reports from the region’s economy ministry, Abkhazia has seen at least 625 new crypto-farms in the last few years, each of which has taken massive quantities of energy to operate. In reality, the state’s electric utility, Chernomorenergo RUE, posted a post on its Facebook page about it.
“Chernomorenergo to cut power to 15 facilities with a total capacity of 8,950 kilowatt-hours (kWh), which is purportedly equivalent to the electricity consumption of 1,800 households. The cuts were made as part of a series of temporary measures to limit the consumption of electricity by certain categories of subscribers.”
The government first attempted to limit all activity in 2018, but a ban had no impact because importing the hardware used for crypto-mining remained legal, according to Economy Minister Christina Ozgan in a speech in September. In September, the government repealed its ban on cryptocurrency mining, instead requiring miners to register and pay higher energy fees – a move that, along with increasing Bitcoin rates, prompted several others to enter the crypto gold rush.