Venezuela stops crypto mining to face energy crisis

Venezuela becomes the latest country to ban crypto mining companies, citing high energy consumption.

According to According to local media outlet AlbertoNews, Venezuela’s Ministry of Electric Energy plans to halt the closure of crypto mining companies that draw power from the national electrical grid SEN (Sistema Elétrico Nacional).

The Venezuelan government plans to control excess energy consumption through the latest measure, while ensuring a consistent energy supply for the local population.

Venezuela’s National Cryptocurrency Association also confirmed the latest ban on the crypto mining industry in a May 18 post. The move follows the recent seizure of 2,000 cryptocurrency mining devices in Maracay as part of an anti-corruption campaign.

The Ministry of Electricity has highlighted the need to provide efficient and stable electrical services across Venezuela, addressing the pressure on the national energy grid caused by these energy-intensive mining companies.

According to authorities, these restrictions are essential to stabilize the country’s energy supply, which has registered strong fluctuations in the last decade.

Venezuela has been experiencing an ongoing energy crisis since 2009, with conditions worsening due to massive blackouts in 2019, which left towns and cities without power for more than a week. Frequent outages deteriorated residents’ daily lives and economic activities in general.

Cryptocurrency mining has high electricity demands. As a result, countries like China and Kazakhstan imposed strict regulations or definitive bans on the activity to preserve their electrical networks, centralizing mining in fewer locations.

The Venezuelan government’s crackdown on cryptocurrency mining is part of a broader effort to combat corruption, an initiative that has resulted in the arrest of several high-ranking officials.

Joselit Ramírez, former head of the National Superintendence of Cryptoassets, is a central figure in the corruption allegations.

Rafael Lacava, governor of the state of Carabobo, highlighted the importance of public collaboration in identifying illegal mining operations and encouraged citizens to report any illegal activities:

“If you, neighbor, see a house you know, tell that person to turn off the farm, or if not, report it, because when they take off the electricity you have to give light to a man so he can earn some reais (money), you are left without light.”

Experts, as reported by AlbertoNews, attribute the crisis to poor maintenance and inadequate investment in the electrical grid. The government, however, blames sabotage and has promised to modernize the state-controlled energy grid.

This is not Venezuela’s first act against cryptocurrency mining activities. Last September, Venezuelan authorities Bitcoin mining machines seized of a gang-controlled prison next to guns. More than 11,000 soldiers were mobilized in this attack.

Venezuelan regulators suspended Bitcoin mining operations in March following investigations into an alleged corruption scheme involving cryptocurrency wallets to redirect funds belonging to Petróleos de Venezuela SA (PDVSA), a state-owned oil company.

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