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Venezuela Bans Crypto Mining As It Grapples With Power Crisis

Venezuela Bans Crypto Mining As It Grapples With Power Crisis

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Venezuela’s National Power Ministry has cracked down on Bitcoin mining farms, disconnecting them from the country’s electricity grid and seizing over 11,000 Bitcoin miners.

The crackdown is part of the Venezuelan government’s efforts to reduce the power consumption of Bitcoin mining farms, which have been siphoning energy from the country’s power grid. 

Venezuelan Authorities Crack Down On Crypto Mining 

According to the country’s power ministry, it was executing an operation to supervise the activities of high-powered customers connected to the country’s power grid, including power-hungry Bitcoin miners. The ministry stated that the pain aimed to “disconnect all cryptocurrency mining farms based in the country from its power system” to avoid the high impact on demand produced by the mining farms. 

The action against crypto mining farms was led by Rafael Lacava, the governor of the state of Carabobo. Carabobo hosts a significant part of the country’s industrial complex, and the actions led to the seizure of over 11,000 ASICs and the disconnection of a number of Bitcoin mining farms. The latest move comes after the government confiscated 2000 cryptocurrency mining devices as part of an anti-corruption initiative. 

A Move To Control Energy Consumption 

Venezuela’s National Power Ministry highlighted the importance of offering reliable and efficient electrical service across the country. The move aimed to eliminate the strain caused on the country’s power supply by high-energy-consuming farms. Officials also stated that the move was necessary to stabilize the country’s extremely unreliable power supply. Venezuela has been experiencing frequent blackouts since 2019, significantly hampering economic activity and daily life. 

Venezuela Joins Other Countries In Implementing Ban 

Cryptocurrency mining is extremely energy-intensive and puts a significant strain on power networks. In response, several countries, such as China and Kazakhstan, have banned or placed stringent regulations on mining. Venezuela’s action against crypto mining is part of a larger anti-corruption drive that has led to the arrest of several senior officials. The governor of Carabobo state has also appealed to the public to help detect illegal mining operations, encouraging citizens to report unlawful activities. 

This is not the first time Venezuela has taken steps against crypto mining activities in the country. In March 2023, the country’s energy supplier shut down crypto mining facilities across the nation as part of a corruption investigation involving the country’s national oil company. Tarek Willian Saab, the country’s Attorney General, stated at the time that officials were running parallel oil operations with assistance from the national crypto department. 

“Tarek William Saab: In this case, it was possible to detect a network of officials who, using their position and levels of authority, proceeded to execute oil operations parallel to Petróleos de Venezuela.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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