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Venezuela bans crypto mining to mitigate excess electricity use

By:
on May 20, 2024
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  • Venezuela will disconnect crypto mining farms to manage energy consumption.
  • Regulators have urged for Public cooperation is to identify illegal mining activities.
  • Over 11,000 Bitcoin miners have been seized in a nationwide crackdown.

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Venezuela’s Ministry of Electric Power has announced plans to disconnect cryptocurrency mining farms from the national grid to manage excessive energy consumption and ensure a stable power supply.

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The National Association of Cryptocurrencies has also confirmed the development via a May 18 X post.

Authorities blame Bitcoin miners 

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Regulators in Venezuela are looking to tighten their grip against excess electricity consumption, with the crypto mining sector being labelled responsible. With this move, they plan to restore consistent supply to residents who have been plagued by outages over the past decade.

Venezuela has struggled with an unstable power supply, which has been marked by frequent blackouts since 2019, affecting both daily life and the economy.

This decision follows the recent confiscation of 2,000 mining devices in Maracay as part of an anti-corruption effort. 

Rafael Lacava, governor of Carabobo state, called for public cooperation in identifying illegal mining activities, urging citizens to report any such operations.

Nationwide crackdown underway

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Meanwhile, Venezuela’s National Power Ministry has also initiated a special operation to disconnect mining farms from the grid. Over 11,000 Bitcoin miners have been seized.

Lacava stated miners wouldn’t be allowed to continue operations while the population faced energy interruptions. Authorities have not specified whether these actions are temporary or permanent. 

According to the governor, more mining farms would be disconnected, and new measures, including a national order to reduce state agencies’ energy use, would be forthcoming.

Venezuela has historically targeted crypto mining on multiple occasions. Last March, the nation’s energy provider shut down mining facilities nationwide amid corruption probes involving the state oil company.

At that time, Attorney General Tarek William Saab alleged that officials were conducting unauthorized oil sales with the crypto department’s help.

The move is part of a broader anti-corruption campaign, which has led to the arrest of several officials, including Joselit Ramírez, the former head of the National Superintendency of Cryptoassets (Sunacrip) and ex-PDVSA president Tareck El Aissami.

Sunacrip, the national crypto regulator, is currently undergoing restructuring, and the legality of crypto mining remains uncertain.

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