Republic of Abkhazia sees surge in crypto mining despite the ban

Crypto mining activity has been increasing for a while now, as miners started coming back following the mid-May Bitcoin halving. However, their numbers are not only rising in China, where the majority of mining takes place. It was also reported to be on the sharp rise in the Republic of Abkhazia, despite the fact that it is illegal to mine crypto in the country.

Mining rig import on the rise

The Republic of Abkhazia decided to ban all crypto-related activities two years ago, in 2018. The decision was made due to the vast amounts of electricity needed to power the mining rigs and the mining process. However, the nation, which is still mostly unrecognized as an autonomous republic, recently noticed an increased import of mining hardware.

According to reports, the customs have noticed the increase of the trend over the last six months, where hardware worth over half a million dollars was imported.

While mining cryptos is, in fact, not legal, there is no ban against importing or simply owning mining rigs. Anyone who does import one, however, is obligated to pay taxes that include 1% of the hardware’s price, as well as 10% VAT.

In 2020, the country managed to earn $84,100 in taxes alone, just by taxing crypto mining rigs. This indicates a massive amount of interest and purchases, which is quite surprising, considering the local laws.

Why does the state allow the import?

Considering said laws, it may be surprising that the country still allows the import of mining rigs. However, the country’s head of the national customs committee, Guram Inapshba, stated that there is a very good reason for this.

Allowing the mining rigs to enter the country and reach their recipient allows the authorities to hunt down illegal miners. Inapshba noted that so far, there are no foreigners involved with crypto mining inside the country, as far as he is aware. Locals, on the other hand, are very much involved — several dozen of them, at least.