Venezuela Acts Tough on Crypto Mining Amid Energy Squeeze

Venezuela’s Ministry of Electric Power announced plans to disconnect cryptocurrency mining farms from the national grid to manage high energy demand and ensure reliable power supply to its citizens. The decision follows the recent seizure of 2,000 cryptocurrency mining machines as part of an anti-corruption drive.

Venezuela Intensifies Crackdown on Illegal Crypto Mining

In response to the escalating electricity demand, the Venezuelan government has decided to disconnect all cryptocurrency mining operations from the Sistema Electrico Nacional (SEN). This action aims to reduce the significant energy load these operations impose on the power system. AlbertoNews reported that 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.

 

Moreover, the move follows recent government actions, including the confiscation of thousands of mining units. Officials assert that these measures are crucial for stabilizing the national power supply, which has been inconsistent over the past decade. Frequent blackouts have notably worsened since 2019, affecting residents’ quality of life and the overall economy.

 

The crackdown on cryptocurrency mining coincides with a broader government campaign against corruption, which recently led to the arrest of several officials. Joselit Ramírez, the former head of the National Superintendency of Cryptoassets (Sunacrip), is notably connected to these allegations. Ramírez’s ties to Tareck El Aissami, a key figure previously in charge of the country’s oil sector, underscore the investigation’s scope, as El Aissami faces multiple charges, including treason and money laundering.

 

Rafael Lacava, Governor of Carabobo state, has also reinforced the need for public cooperation in identifying illegal mining activities. He urged residents to report any unauthorized operations, highlighting the community’s role in safeguarding their electrical service. This community-focused enforcement approach aims to supplement the national efforts to mitigate unnecessary power consumption.

Energy Crisis Spurs Crypto Mining Clampdown

Cryptocurrency mining is notorious globally for its substantial electricity requirements. Countries like China and Kazakhstan have also imposed restrictions or outright bans on the activity to protect their power grids and redirect energy to essential services. The Venezuelan government’s strategy reflects a similar motive, prioritizing energy stability over the burgeoning crypto-mining industry.

 

Experts point to poor maintenance and lack of investment in Venezuela’s power infrastructure as primary causes of the ongoing electricity crisis. Although officials blame external sabotage and have pledged to upgrade the grid, these promises have yet to culminate in visible improvements. The recent government measures, therefore, aim not only to address the immediate energy shortages but also to initiate a longer-term recovery of the national power system.

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