Venezuela has banned cryptocurrency mining to safeguard its national power grid, following a recent crackdown that included the confiscation of 2,000 mining devices as part of an anti-corruption initiative.
Government Crackdown on Crypto Mining
The Venezuelan government has joined other nations in opposing crypto mining due to its substantial electricity demands. According to local news sources, the Ministry of Electric Power plans to disconnect cryptocurrency mining farms from the national grid to regulate excessive energy consumption and ensure a stable power supply for the population. An announcement from Venezuela’s National Association of Cryptocurrencies confirmed the prohibition of crypto mining in the country.
Impact on National Power Supply
This decision follows the seizure of 2,000 cryptocurrency mining devices in Maracay, part of an anti-corruption drive. The Ministry emphasized the necessity of providing efficient and reliable electrical service across Venezuela, stating that the high-energy consumption of mining farms contributes to the instability of the national power supply. The country has faced recurring blackouts, particularly since 2019, severely impacting residents’ daily lives and the overall economy.
Global Context of Crypto Mining Bans
Venezuela’s move is part of a broader trend where countries such as China and Kazakhstan have implemented stringent regulations or outright bans on cryptocurrency mining due to its hefty electricity demands. The Venezuelan government’s actions are also linked to a larger anti-corruption push, resulting in the arrest of several top officials, including Joselit RamÃrez, the former head of the National Superintendency of cryptoassets.
Public Collaboration and Past Actions
Rafael Lacava, governor of Carabobo state, has emphasized the importance of public collaboration in detecting illegal mining operations, urging citizens to report any unlawful activities. This is not Venezuela’s first crackdown on crypto mining; in March 2023, the country’s energy supplier shut down mining facilities nationwide during corruption investigations involving the state oil company. Attorney General Tarek William Saab revealed that government officials were allegedly running parallel oil operations with assistance from the national crypto department.
Elsewhere, in 2023, eight major cryptocurrency mining operators in Kazakhstan signed an open letter to President Kassym-Jomart Tokayev, complaining about high energy prices for crypto miners.
Venezuela’s latest measures highlight the ongoing global challenges and regulatory responses to the energy-intensive nature of cryptocurrency mining.
