Russia’s Mining Ban FiascoThe director of Chernomorenrgo, Ruslan Kvarichiya, said that the ban had the opposite of the intended effect. Technically, the law forbade mining equipment to be hooked up to Chernomorenergo’s grids. It did not, however, ban importing equipment into the territory. In the end, local energy companies had to deal with an unchecked increase in new farms. The vice prime minister and minister of economics said that electrical engineers, “know better than anyone else,” how crypto mining continued to grow under the ban, an apparent hint at corruption. The shadow economy of Bitcoin mining grew so large that, in September, the power grid once again approached a breakdown. To prevent a total energy collapse, ministers decided it would be better to legalize and regulate mining.
The Lesser of Two EvilsThough mining is booming in Abkhazia, its close neighbor Russia is a legal mess when it comes to crypto regulation. A Russian law will come into effect on Jan. 1, 2020, which bans somewhat inconsistent uses of crypto. For example, while mining will not technically be illegal, miners will be unable to receive mining rewards in digital currency. While cryptocurrencies will be legal and regulated, using them as payment will be banned in the country. Despite some nuances (for example, inheriting cryptocurrency) the new Russian law will be a headache for miners and traders. The legalization of mining in Abkhazia comes at an inopportune time, but considering the threat of the grid going offline, it may be the lesser of two evils.