As @Elektron stated, Kobo had to remove support on their servers for older security protocols that are no longer considered to be secure. Unfortunately, the older firmware uses these protocols during the setup and do not work. You want firmware 3.19 or later.
At the same time, Kobo also dropped support for older devices. The Mini still gets some support, but, not firmware updates. The Kobo desktop application still has support for the Mini, which includes doing the setup. It will update the firmware to the latest official release, which is 3.19.5761-s. If you do not want to, or can't use the desktop application, you can install the firmware manually and the device should do the setup afterwards. You can also use later firmware. They still contain support for the Mini as it is probably more work to remove than it is worth it (and I suspect some Kobo developers still use them). Someone always tests the firmware and so far have always reported success.
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