Published on May 24, 2024
By: Ertix Truepatch
The Venezuelan government has started a new crackdown on cryptocurrency miners, bringing back memories for many. Before the January 30, 2019 decree regulating the crypto sector, news of raids on farms was commonplace. It seems this difficult period, which many crypto enthusiasts thought was over, is making a return.
The information surfaced through an Instagram post by the Ministry of Electric Energy (Mppee). The post explains that Corpoelec, the state energy company, has initiated a plan to disconnect all mining farms in the country. According to the ministry, the goal is to “ensure efficient and reliable service for all Venezuelans”.
The Mppee points out the high energy consumption demanded by crypto mining facilities. The concern arises from Venezuela’s electrical system, which is among the most degraded on the continent, particularly outside Caracas. For years, citizens have faced abrupt power cuts and frequent rationing. The situation reached its lowest point in 2019 with a blackout that affected nearly the entire country for several days.
Since then, the situation hasn’t exactly done a 180-degree turn; many rural communities and cities far from the capital still grapple with serious electrical issues. However, there hasn’t been a new crisis like 2019. Interestingly, the government has been dodging responsibility for years, pointing fingers at third parties… This time, it seems crypto mining users are being blamed for the energy crisis.
Once again, Venezuela joins the nations imposing severe restrictions on crypto mining. Among them are Kazakhstan, which enacted a law in 2023 to limit miners’ energy consumption; Kuwait, where leaders justified a total ban by citing the need to combat money laundering and terrorism financing; and China, which declared all crypto-related activities illegal in 2021. Meanwhile, Norway currently lacks legislation on the matter, but its Minister of Energy, Terje Aasland, has already announced plans to prevent the country from becoming a haven for supporters of crypto mining.
Lacking a clear direction…
Venezuelan crypto miners are caught in a sort of limbo; while the regulations from 2019 are still in place, the recent dismantling of facilities may drive several users underground. There hasn’t been any official statement from the government or SUNACRIP, an entity that, in 2020, signed an agreement with Corpoelec to introduce more regulations and ensure fair rates for crypto miners.
It’s crucial to remember an incident from 2023 involving SUNACRIP in a corruption scandal… It was revealed that the entity was undergoing a restructuring process expected to last about 6 months. This upheaval significantly impacted mining facilities holding SUNACRIP licenses, forcing them to shut down their equipment in anticipation of documentation renewal—a process that never came.
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Further news:
- Brazil’s Central Bank Aims to Finalize Crypto Regulation by End of Year.
- El Salvador’s Bitcoin Mining: Nearly 474 BTC Mined Since 2021, According to Reuters.
- Deutsche Bank Joins Project Guardian, Singapore’s Initiative for Asset Tokenization.
- Get ready for ‘Champions Tactics of Grimoria’: Ubisoft’s maiden voyage into Web3 gaming.
- The Kenyan government has appointed Marathon Digital, a significant mining company, as an advisor.
- Bancolombia launches Wenia exchange and introduces a stablecoin.
We also suggest giving this a read: Latin America’s Crypto Awakening: Navigating Challenges, Seizing Opportunities.