Georgia Seizes 195 Mining Devices in Mestia Crypto Raids

Georgia’s Samegrelo-Zemo Svaneti Police Department seized an additional 47 cryptocurrency mining devices in Mestia municipality on Friday, bringing the confirmed total in an active enforcement campaign to 195 units across two operations since June 4. The seizures target residents who authorities say systematically generated digital currency through unauthorized electricity consumption, a practice officials link to annual losses of GEL 20 to 25 million (approximately $9.4 million) and a monthly surcharge on every electricity subscriber’s bill across Georgia.

Vice Prime Minister Mamuka Mdinaradze, who announced the crackdown on June 1, has put Mestia’s 2025 electricity consumption at 133 million kilowatt-hours, more than 13 times the figure for comparable Georgian municipalities. Both operations proceed under Article 229, Part 2 of Georgia’s Criminal Code, the electricity-use violation statute carrying up to three years in prison.

195 Devices and Counting

The first operation, documented in an official Ministry of Internal Affairs video from June 4, recovered 148 devices from six separate locations. Investigators described the activity as organized: locals “systematically generating cryptocurrency and obtaining illegal income through the unlawful and illicit consumption of large amounts of electricity,” in the ministry’s wording. Friday’s sweep by the Samegrelo-Zemo Svaneti Police Department added 47 more, with police stating that intensive investigative measures are continuing to identify other individuals involved in the case.

Prime Minister Irakli Kobakhidze addressed the situation on June 4, telling journalists that Mestia’s consumption is disproportionately high compared to similar municipalities and estimating that more than 20 million kWh of the municipal total is being consumed illegally for cryptocurrency. Authorities confirmed the first 148 devices seized from six Mestia locations in a sweep that coincided with the government’s June 1 metering announcement.

Svaneti has no natural gas distribution network, making electricity the primary heat source for most households through winters that drop well below freezing. When mining operations overload the grid and cause outages, the consequences in a region with no gas backup go well beyond inconvenience. Article 229, Subparagraph “b” of Part 2, the specific provision under which both operations run, covers violations that create risks to human health or life rather than commercial infractions alone, and that framing reflects the physical stakes of grid collapse in a mountain community.

• 195 mining devices recovered across two operations (148 on June 4, 47 on June 6)
• Six locations identified in the first sweep; additional sites under active investigation
• Penalty ceiling: up to 3 years’ imprisonment under Article 229, Part 2, Subparagraph “b”
• Annual losses attributed to illegal mining: GEL 20 to 25 million (approx. $9.4 million)

Mestia’s Electricity Consumption, Year by Year

Energy distributor Energo-Pro Georgia, which supplies the Svaneti district, tracked Mestia’s annual power draw in kilowatt-hours (kWh) over six consecutive years. The dataset shows a largely upward trajectory with one brief pause:

The 2025 figure of 132.9 million kWh, publicly rounded to 133 million in government briefings, sits 45% above the 2021 level. The 2022 spike of nearly 20% coincided with Bitcoin reaching new highs globally and drawing more commercial-scale mining hardware online in the region. The brief dip in 2023, followed by resumed growth, tracks the broader economics of cryptocurrency mining: operators pause when prices fall and re-engage when they recover. In a single month during 2025, Energo-Pro Georgia reported that Mestia alone consumed as much electricity as 15 comparable Georgian municipalities combined. Georgia generates roughly 80% of its domestic power from hydroelectric sources, keeping national tariffs relatively low, but Mestia has operated under a full subsidy that the rest of the country helps finance.

Who Absorbs the Cost

The financial damage from Mestia’s consumption gap travels well beyond Svaneti. At his June 1 briefing, covered in full by Georgia’s national broadcaster 1TV, Mdinaradze put the mechanism in direct terms:

Each consumer in the country, with every payment they make, is paying an extra lari and a half directly on account of this problem.

GEL 1.5 per month sits on the bills of every Georgian electricity subscriber. Upper Svaneti is the only region in Georgia where the government has historically covered 100% of residents’ electricity costs; other high-mountain areas receive a 50% tariff discount. Because the subsidy is socialized across the national tariff structure, the cost of Mestia’s over-consumption flows to all consumers through their regulated bills. There is no visible dedicated line item; it moves through the rate calculations set by the Georgian National Energy and Water Supply Regulatory Commission (GNERC), the country’s energy regulator.

Tourism is taking a separate hit. Kapiton Georgioliani, the mayor of Mestia, backed the crackdown publicly, noting that tourists have left the region during mining-driven blackouts. “Limiting mining will have a good effect on the development of our region,” Georgioliani said. Mestia is the administrative center of Georgia’s Svaneti tourism region, home to ski resorts and the medieval stone towers that draw visitors each winter. Blackouts harm both revenue streams directly.

A Subsidy from the 1990s

How Free Power Became Mining Infrastructure

Svaneti’s free electricity arrangement dates to the 1990s, when Georgia’s highland support program provided economic relief to high-altitude communities with no natural gas supply and total dependence on electric heating through mountain winters. The policy was designed for an isolated rural population in the post-Soviet period, not for what the region became over the next three decades.

Georgia emerged through the 2010s as an attractive destination for cryptocurrency miners, combining cheap hydroelectric power with a permissive business environment. Svaneti, with electricity entirely free for households within usage limits, drew operators whose single largest cost vanished. A 2022 Eurasianet report on Svaneti’s electricity crisis documented how far community-level responses had fallen short: villagers resorted to taking oaths on church icons pledging not to mine, a measure that did nothing to slow hardware being plugged in elsewhere. The Enguri Dam, the hydroelectric facility on the Enguri River flowing from Svaneti’s highlands, managed jointly with the Russian-occupied territory of Abkhazia under a 1990s agreement, generates much of the electricity being diverted to mining rigs.

By 2022, Davit Narmania, then chair of GNERC, was calling uncontrolled cryptocurrency consumption in Svaneti a major national challenge, second only in severity to occupied Abkhazia, where free power has fueled a parallel illegal mining crisis. In January 2026, Mestia’s municipality city hall warned the situation had become “extremely aggravated.” Metering had proved impossible for years, the vice prime minister acknowledged at the June 1 briefing, citing “various conflicting reasons.”

Georgia’s Legitimate Mining Sector

Not all of Georgia’s cryptocurrency mining history is illicit. Bitfury, a Bitcoin mining company, built a facility in the city of Gori as early as 2014, among the first large-scale industrial mining operations in the Caucasus region. Georgia’s legal framework has been relatively favorable to the industry: value-added tax (VAT) exemptions apply to some crypto-related activities, and free industrial zones have offered structured cost advantages to commercial operators who pay for their electricity.

The operations that took root in Svaneti used the same cheap hydroelectric supply but cut the cost side out entirely. Authorities have been explicit that the current crackdown targets unauthorized electricity consumption, not cryptocurrency mining as a category. Legal, metered, paid-for mining falls outside the scope of Article 229; the grid connection without payment is what triggers criminal liability under Georgian law.

The Metering Rollout and What It Targets

Smart Meters and Grid Rehabilitation

On the infrastructure side, Energo-Pro Georgia is deploying smart meters at both household level and across each village and settlement in the municipality. The vice prime minister said this approach will allow authorities to “identify the exact sources of the problem more effectively.” The rollout covers the full spread of Svaneti’s villages and populated settlements beyond the main town, a logistics undertaking in terrain where some communities are accessible only by mountain road.

GNERC member Givi Sanikidze called the initiative “clearly correct,” arguing that metering will reduce unauthorized consumption, ease pressure on overloaded transmission lines, and allow the distribution company to rehabilitate grid infrastructure running above rated capacity. Reduced illegal consumption will lower the volume of electricity the distributor needs to purchase, cutting systemic losses across the network. The vice prime minister warned at the June 1 briefing that any obstruction of the meter installation process will be met with a “firm legal response.”

The Criminal Prosecution Track

The new tariff structure preserves free electricity for normal household use. Residents keep the subsidy within an established consumption limit, and only usage above that threshold triggers the regulated tariff. A household heating a mountain home sees no change. An operator running racks of ASIC (Application-Specific Integrated Circuit) mining hardware on the public grid without payment faces a sharply different calculation once meters are installed.

• Meters installed at village and settlement level across all of Mestia municipality
• Law enforcement assigned full oversight of the rollout; obstruction subject to prosecution
• Free electricity preserved for residents within normal household consumption limits
• Consumption above the threshold subject to the regulated tariff
• Large-scale unauthorized use subject to criminal prosecution, up to three years in prison
• The energy regulator endorses the initiative; grid rehabilitation to follow as illegal consumption falls

The Ministry of Internal Affairs has not announced when formal charges will be filed or how many individuals remain under active investigation. Intensive search operations across the municipality are ongoing.