Georgia Intensifies Crackdown on Illegal Crypto Mining Operations

Vice Prime Minister Mamuka Mdinaradze highlighted massive overconsumption straining the local power grid, prompting large-scale metering and ongoing police actions to address the issue affecting residents and national energy costs.

Recent Police Seizures in Mestia

Officers from the Samegrelo-Zemo Svaneti Police Department conducted searches in the Mestia municipality and seized an additional 47 crypto mining devices. This follows an earlier operation where 148 devices were confiscated across six locations.

The investigations focus on systematic unauthorized consumption of electricity for cryptocurrency production, which has generated illegal income for locals involved. Police continue intensive measures to identify further participants and pursue legal action.

Government Response and Energy Impact

Vice Prime Minister Mamuka Mdinaradze has emphasized the scale of the problem. Electricity consumption in Mestia reached 133 million kilowatt-hours in 2025, compared to about 10 million in similar municipalities. This excess has caused estimated damages of 20-25 million GEL, roughly up to $9.5 million annually, and contributed to higher costs for ordinary consumers across the country.

Large-scale metering operations are being rolled out across villages and settlements in the region to detect hidden consumption. Mdinaradze noted that electricity will remain free for residents up to a set limit, with the measures specifically targeting illegal mining activities that have led to grid overload and frequent power outages affecting both locals and tourists.

Legal Framework and Broader Context

The cases are being investigated under Subsection “b” of Part 2 of Article 229 of the Criminal Code of Georgia, which addresses violations of electricity use rules and carries penalties of up to three years in prison.

Georgia has long attracted cryptocurrency operations due to its abundant hydropower resources from the Caucasus Mountains, which provide relatively low-cost electricity. Legitimate companies, such as Bitfury, established early mining facilities in the country years ago. However, unregulated activities have created significant challenges for the energy infrastructure.

Implications for Energy Policy and Residents

The crackdown reflects a wider governmental push to balance the potential benefits of digital asset activities with the need to protect public resources. Officials stress that legitimate consumers will not be penalized, while illegal operations face accountability.

By addressing these issues, authorities aim to prevent further strain on the national energy system and ensure fair access to electricity. The operations demonstrate coordinated efforts between law enforcement and energy oversight bodies to tackle unauthorized mining that undermines infrastructure and raises costs for everyone.

As investigations proceed, more details may emerge regarding the full extent of the networks involved and additional measures to regulate the sector effectively.