Venezuela Implements Ban on Crypto Mining Companies Due to Energy Crisis.
Reports from local news outlet AlbertoNews indicate that Venezuela’s Ministry of Electric Power is taking steps to disconnect crypto mining firms that rely on the national power grid SEN (Sistema Electrico Nacional).
The government’s decision to ban crypto mining operations is aimed at addressing the country’s energy crisis by curbing excessive energy consumption. This move is intended to ensure a stable power supply for the local population.
The National Association of Cryptocurrencies in Venezuela verified the recent ban on the crypto mining sector in a post on X dated May 18. This action comes after the authorities confiscated 2,000 cryptocurrency mining devices in Maracay as part of an anti-corruption initiative.
The Electric Ministry emphasized the importance of ensuring efficient and stable electrical service across Venezuela by tackling the strain on the national energy grid caused by energy-intensive mining operations.
Officials argue that imposing these limitations is crucial to achieving stability in the country’s power supply, which has faced significant fluctuations over the past decade.
Since 2009, Venezuela has grappled with a persistent power crisis, compounded by severe blackouts in 2019 that left towns and cities without electricity for extended periods, exceeding a week in some cases. These frequent power outages have severely impacted residents’ daily lives and hindered overall economic activities.
The significant electricity requirements of cryptocurrency mining have prompted countries such as China and Kazakhstan to enact stringent regulations or complete bans on this activity, aiming to protect their power infrastructures and concentrate mining activities in fewer regions.
Venezuela’s recent actions against cryptocurrency mining are said to be a component of a wider anti-corruption campaign, which has also led to the apprehension of numerous senior officials.
Joselit Ramírez, former head of the National Superintendency of Cryptoassets, is a key figure in the corruption allegations.
Rafael Lacava, governor of Carabobo state, emphasized the importance of public cooperation in identifying illegal mining operations. He encouraged citizens to report any unlawful activities, stating:
“If you, as a neighbor, notice a familiar house engaging in such activities, advise them to cease their operations. If not, report the activity, because when they consume excessive electricity, it impacts the entire community. It’s essential to ensure fair access to electricity for everyone.”
According to experts, as reported by AlbertoNews, the crisis stems from inadequate maintenance and insufficient investment in the power grid. The government, however, attributes the issues to sabotage and has committed to modernizing the state-controlled power network.
This recent action is not Venezuela’s first response to crypto mining activities. Last September, authorities confiscated Bitcoin mining machines from a gang-controlled prison, alongside weapons. The operation involved over 11,000 soldiers.
In March, Venezuelan regulators suspended Bitcoin mining operations as part of an investigation into an alleged corruption scheme. The scheme purportedly involved cryptocurrency wallets diverting funds from Petróleos de Venezuela SA (PDVSA), a state-run oil company.
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