Venezuela Cracks Down on Crypto Mining Amid Energy Crisis

  • Sergey Maga
  • 20 May, 2024 00:06
Venezuela Cracks Down on Crypto Mining Amid Energy Crisis

Venezuela has become the latest nation to ban cryptocurrency mining, citing the high energy consumption of these operations. The Ministry of Electric Power plans to cut off crypto-mining companies from the national power grid (SEN) to manage excess energy consumption and ensure a stable power supply for residents. This move was confirmed by the National Association of Cryptocurrencies on May 18 via a post on X, according to Albertonews.

This crackdown is part of a broader initiative to stabilize Venezuela’s power grid, which has suffered from significant fluctuations over the past decade. The country has faced ongoing power crises since 2009, with severe blackouts in 2019 leaving towns and cities without electricity for over a week. The frequent outages have disrupted daily life and economic activities, prompting the government to take drastic measures.

Crypto mining, known for its high electricity demands, has led other countries like China and Kazakhstan to impose strict regulations or bans to preserve their power grids. In Venezuela, the latest ban follows the seizure of 2,000 cryptocurrency mining devices in Maracay as part of an anti-corruption drive.

Rafael Lacava, the governor of Carabobo state, has urged public cooperation in identifying illegal mining operations. He encouraged citizens to report any unlawful activities to help stabilize the power supply.

Experts attribute Venezuela’s power crisis to poor maintenance and insufficient investment in the power grid. However, the government blames sabotage and has pledged to modernize the state-controlled power network. This recent action is not the first against crypto mining in Venezuela. Last September, authorities seized Bitcoin mining machines from a gang-controlled prison, and in March, regulators suspended Bitcoin mining operations amid a corruption investigation involving the state-run oil company, Petróleos de Venezuela SA (PDVSA).

The government aims to ensure that power is efficiently distributed to all citizens, preventing the energy-intensive crypto mining industry from exacerbating the country’s energy issues. The crackdown reflects a growing global trend of regulating or banning crypto mining to manage energy consumption and maintain grid stability.

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