Venezuela bans crypto mining to protect power grid
In a significant move aimed at stabilizing its national power grid, Venezuela has decided to ban cryptocurrency mining. This decision follows a series of recent crackdowns, including the confiscation of 2,000 cryptocurrency mining devices in Maracay, Aragua state, as part of an anti-corruption initiative.
Venezuela’s Ministry of Electric Power (MPPPE) announced plans to disconnect cryptocurrency mining farms from the national grid. This action is intended to regulate the excessive energy consumption associated with crypto mining and ensure a stable power supply for the country's population. The National Association of Cryptocurrencies confirmed via an X post that crypto mining is now prohibited throughout the nation, emphasizing the government's priority on maintaining energy stability over supporting the growing crypto-mining industry.
The country has faced significant challenges with its power supply, including recurrent blackouts that have plagued residents and impacted economic activities since 2019. These issues have prompted the government to take decisive steps to reduce the strain on its electrical infrastructure, which has been exacerbated by the high energy demands of cryptocurrency mining.
Cryptocurrency mining is known globally for its substantial electricity consumption. In response, other countries, such as China and Kazakhstan, have also implemented stringent regulations or outright bans on crypto mining to protect their power grids and ensure energy availability for essential services.
The recent crackdown in Venezuela is part of a broader anti-corruption campaign, which has led to the arrests of several high-ranking officials, including Joselit Ramírez, the former head of the National Superintendency of Cryptoassets (Sunacrip). The government has called for public cooperation in identifying illegal mining operations, with Carabobo state Governor Rafael Lacava urging citizens to report any suspicious activities to help safeguard the reliability of the electricity supply.
This is not Venezuela’s first action against crypto mining. In March 2023, the country’s energy supplier shut down mining facilities nationwide as part of efforts to reorganize the national crypto department amid corruption investigations involving the national oil company. The attorney general, Tarek William Saab, revealed that government officials were allegedly running parallel oil operations with the assistance of the national crypto department.
The global crypto mining community has faced similar challenges elsewhere. For instance, in Kazakhstan, eight major cryptocurrency mining operators signed an open letter to President Kassym-Jomart Tokayev last year, complaining about the high energy prices for miners. This reflects a growing trend of countries reassessing the impact of crypto mining on their energy resources and infrastructure.
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