Venezuela Bans Crypto-Mining To Protect Power-Grid

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by Tyler Durden
Monday, May 20, 2024 - 07:00 PM

Authored by Amaka Nwaokocha via,

The Venezuelan government has joined the list of countries that have frowned on crypto mining due to its hefty electricity demands.

According to a local news outlet, Venezuela’s Ministry of Electric Power has unveiled plans to disconnect cryptocurrency mining farms from the national grid. The move aims to regulate excessive energy consumption and guarantee a stable power supply for the population.

An X post from Venezuela’s National Association of Cryptocurrencies stated that crypto mining is prohibited in Venezuela.

This move follows a recent crackdown involving the confiscation of 2,000 cryptocurrency mining devices in the city of Maracay as part of an anti-corruption initiative.

Source: Asociación Nacional de Criptomonedas

The ministry emphasized the need to offer efficient and reliable electrical service across Venezuela by eliminating the strain caused by these high-energy-consuming farms. According to officials, these measures are essential to stabilize the national power supply, which has been unreliable for the past decade.

The country has been experiencing recurring blackouts, particularly since 2019, which have significantly impacted residents’ daily lives and overall economic activity.

Cryptocurrency mining has hefty electricity demands. In response, some countries such as China and Kazakhstan have implemented stringent regulations or outright bans on the practice.

The Venezuelan government’s move against cryptocurrency mining is reportedly part of a larger anti-corruption push, which has led to the arrest of several top officials. Joselit Ramírez, the ex-head of the National Superintendency of Cryptoassets, is a key figure in the corruption allegations.

Rafael Lacava, governor of Carabobo state, has reportedly highlighted the importance of public collaboration in detecting illegal mining operations, encouraging citizens to report any unlawful activities.

However, this is not Venezuela’s first act against crypto mining activities. In March 2023, Venezuela’s energy supplier shut down crypto mining facilities nationwide as part of corruption investigations involving the country’s state oil company.

Venezuela’s attorney general, Tarek William Saab, said at the time that government officials were allegedly running parallel oil operations with the assistance of 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.