Seizing Crypto-Mining Equipment Has Saved Kosovo ‘Millions’, Govt Claims

Crypto-mining equipment confiscated by police in the north of Kosovo. Photo: Kosovo Minister of Economy Artane Rizvanolli/Twitter

Kosovo’s Ministry of Economy told BIRN that confiscating crypto-mining equipment from the Serb-majority north has saved the state budget some 2 million euros a year in electricity.

Last week, Kosovo Police undertook two separate raids against crypto-mining in the north resulting in the confiscation of around 200 cryptocurrency mining equipments.

“The seizure of cryptocurrency mining equipment, an activity with an extremely high consumption of electricity, combined with actions to close drug labs, and all other actions in the four municipalities in the north of the country, have had a significant impact on reducing consumption of electricity,” Edita Pozhegu, advisor to the Minister of Economy, told BIRN on Monday.

According to Pozhegu, energy consumption in the north had constantly increased over the years, by 14 per cent in 2020 alone. After the government banned crypto-mining equipment in January 2022, energy consumption fell by 3 per cent.

“This has a direct effect on the protection of the state budget … especially at a time when we were at the peak of the European energy crisis and import prices experienced enormous increases,” Pozhegu explained.

“Only from the (police) operations in the north, taking into account the high energy consumption of the confiscated equipment, the state budget has been saved about 2 million euros a year,” she claimed.

The Minister of Economy, Artane Rizvanolli, announced on Twitter on Sunday that police had confiscated 20 crypto-mining devices in the Serb-majority north.

“These and similar developments in northern municipalities have nothing to do with inter-ethnic relations in Kosovo, as some like to portray. It is an issue of rule of law versus illegal activities,” Rizvanolli wrote.

Two days before, on April 14, Rizvanolli tweeted that police had confiscated 175 pieces of crypto-mining equipment in Zubin Potok. Police have not notified of any arrests so far.

“Non-payment of electricity bills encourages such illegal activities,” Rizvanolli wrote on Twitter.

Since the Kosovo war ended in 1999, the four Serb-dominated municipalities have not paid for their electricity.

Since 2017, Kosovo’s Energy Distribution and Supply Company, KOSTT, has been responsible for paying for the energy used by the four municipalities. According to some estimates, this costs around 12 million euros a year. However, KOSTT claims that in 2021 alone, the four municipalities ran up a debt of 40 million euros.

In August 2022, the government allocated 40 million euros to cover unpaid electricity in the four municipalities.

“This is why Serbia blocks implementation of the energy road map. We fulfilled all our commitments. Time for the other side to do the same, urgently!,” Rizvanolli continued.

In June 2022, Belgrade and Pristina agreed a “road map” on how to solve the problem of electricity distribution in the Serb-majority north, one of several longstanding disputes the between two countries, to implement an existing 2013 agreement.

Based on this road map, Kosovo Serbs would start paying for electricity, not to the Kosovo state, however, which Serbia does not recognise, but to Drustvo Elektrosever, a subsidiary in Kosovo of the Serbian state-owned power company Elektroprivreda Srbije.

Second, Kosovo authorities would have access to the Valac/Vallaq substation, an important part of the country’s power grid that is located in a Serb-majority municipality, and to other energy infrastructure that Pristina was not able to access previously.

However, implementation of the roadmap has stalled.

On June 24, 2022, Energy Regulator of Kosovo, ERO, licenced Drustvo Elektrosever to supply electricity and bill users in the of four northern municipalities. But Kosovo authorities claim that Elektrosever has not met its obligations to fulfill the criteria to operate within the Kosovo market.

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