Venezuela has become the latest country to ban cryptocurrency mining companies due to their high energy consumption.
According to local news outlet AlbertoNews, Venezuela's Ministry of Electricity plans to cut off cryptocurrency mining companies that supply electricity from the national grid SEN (Sistema Electrico Nacional).
The Venezuelan government plans to take this measure to curb excessive energy consumption while ensuring a stable power supply for local residents.
Venezuela’s National Cryptocurrency Association also confirmed the latest ban on the crypto mining industry in an X post on May 18th. The move follows the recent seizure of 2,000 cryptocurrency mining equipment in Maracay as part of anti-corruption efforts.
The Ministry of Electricity has outlined the need to provide efficient and stable electricity services throughout Venezuela by addressing the stress on the country's energy grid caused by these energy-intensive mining companies.
Officials say these restrictions are essential to stabilize the country's power supply, which has seen wild fluctuations over the past decade.
Venezuela has been suffering from an ongoing power crisis since 2009, and the situation worsened in 2019 when large-scale power outages left towns and cities without power for more than a week. Frequent power outages have worsened residents' daily lives and overall economic activity.
Cryptocurrency mining requires large amounts of electricity. As a result, countries such as China and Kazakhstan are concentrating mining in fewer locations, imposing strict regulations to maintain power grids or banning mining activities altogether.
The Venezuelan government's crackdown on cryptocurrency mining is reportedly part of a broader anti-corruption effort, which has resulted in the arrest of several senior officials.
Joselit Ramírez, the former head of the National Cryptoassets Supervision Authority, is at the center of corruption allegations.
Carabobo Governor Rafael Lacaba noted the importance of public cooperation in identifying illegal mining operations and encouraged the public to report any illegal activities.
“If you, as a neighbor, see a house you know, tell that person to turn off the power to the farm. If not, report it. Because once the electricity is removed, Because we have to give people light so they can earn money.''A few reais (money) and you won't have electricity. ”
As reported by AlbertoNews, experts attribute the crisis to poor maintenance and inadequate investments in the power grid. But the government has condemned the sabotage and promised to modernize the state-controlled power grid.
This is not the first action taken by Venezuela against cryptocurrency mining activities. Last September, Venezuelan authorities seized Bitcoin mining machines along with weapons from a gang-run prison. More than 11,000 soldiers were committed to the attack.
Venezuelan regulators suspended Bitcoin mining operations in March following an investigation into corruption allegations involving a cryptocurrency wallet used to channel funds for state oil company Petroleos de Venezuela SA (PDVSA).
