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Venezuela Cracks Down on Crypto Mining Amid Energy Crisis

Venezuela Cracks Down on Crypto Mining Amid Energy Crisis

Venezuela’s Ministry of Electric Power declared intentions to cut cryptocurrency mining operations off the national grid to control the country’s high energy consumption and provide a steady supply of electricity to its people. The move comes after 2,000 bitcoin mining equipment were recently taken into custody as part of an anti-corruption campaign.

Venezuela Steps Up Efforts to Combat Illegal Crypto Mining

Due to the country’s rising electricity demand, the Venezuelan government has decided to cut off all cryptocurrency mining activities from the Sistema Electrico Nacional (SEN). Consequently, this step aims to lessen the considerable energy strain that these procedures place on the national power system. According to Alberto News, the Ministry has emphasized the necessity of removing the burden that these energy-intensive farms create. This measure is to ensure effective and dependable electricity service throughout Venezuela, thereby addressing the growing energy needs of the nation.

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Furthermore, the measure follows other recent government initiatives, such as the seizure of thousands of mining units. According to officials, these steps are essential to stabilising the country’s electricity supply, which has fluctuated over the last ten years. Since 2019, the frequency of blackouts has noticeably increased, impacting both the general economy and the locals’ quality of life. 

The government’s battle against corruption, resulting in the arrest of multiple officials, is occurring alongside the crackdown on cryptocurrency mining. Notably, these efforts are associated with Joselit Ramírez, the former director of the National Superintendency of Cryptoassets (Sunacrip). Furthermore, Ramírez’s connections to Tareck El Aissami, a prominent figure who previously oversaw the nation’s oil industry, highlight the probe’s extent. Additionally, El Aissami faces accusations of treason, money laundering, and various other offenses, underscoring the investigation’s comprehensive scope and seriousness.

The governor of Carabobo, Rafael Lacava, has also emphasised the importance of public assistance in locating illicit mining activity. He underlined the community’s responsibility to protect their electrical service and advised residents to report unauthorised actions. This community-focused enforcement strategy aims to support national initiatives to reduce needless energy use.

Energy Crisis Leads to a Ban on Crypto Mining

Worldwide, cryptocurrency mining is well known for consuming significant electricity. Various nations, including China and Kazakhstan, have imposed restrictions on this practice to protect electrical systems and prioritize essential services. Similarly, the Venezuelan government’s approach focuses on energy stability over the booming cryptocurrency mining sector. Experts argue that inadequate maintenance and insufficient investment are the primary causes of Venezuela’s ongoing electrical crisis. Despite officials’ promises to rebuild the grid and their claims of external sabotage, significant improvements remain unseen. Therefore, the latest government measures aim to initiate a longer-term recovery of the national power system and address the energy constraints effectively.

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