Venezuela Plans Closure of Cryptocurrency Mining Farms
Venezuela’s Ministry of Electric Power has declared that it will disconnect all cryptocurrency mining farms from the national power grid, aiming to manage the high energy demand from these farms and ensure a reliable service for citizens. The announcement, reported by local media outlet AlbertoNews on May 18, stated that the purpose is to disconnect all cryptocurrency mining farms in the country from the National Electrical System (SEN) to prevent a significant impact on demand and maintain efficient and reliable service for the Venezuelan people. This decision comes after the seizure of 2,000 cryptocurrency mining machines in the country as part of the government’s anti-corruption campaign, which has led to the arrest of several officials from state institutions.
The National Superintendency of Cryptoassets (Sunacrip), which has been under a restructuring board since the arrest of Superintendent Joselit Ramírez, is also involved in the corruption scandal. Ramírez has connections to Tareck El Aissami, the former Petroleum Minister and former president of Petróleos de Venezuela (PDVSA), who has been charged with treason, embezzlement, misuse of influence, money laundering, and criminal association.
Venezuela has been facing an ongoing electricity crisis since 2009, exacerbated by major blackouts in 2019 that left cities without power for up to seven days. These frequent power outages have had a negative impact on the country’s quality of life and economic activities. As a result, Rafael Lacava, the Governor of Carabobo state, has confirmed restrictions on cryptocurrency mining farms due to their significant electricity consumption. He has urged residents to report illegal cryptocurrency mining operations to prevent power shortages.
Experts attribute the electricity crisis in Venezuela to poor maintenance and inadequate investment in the power grid, while the government blames sabotage and has promised to modernize the state-controlled power network. Bitcoin (BTC) and cryptocurrency mining are known globally for their high energy consumption, with countries like China and Kazakhstan banning the activity to preserve their power grids and centralize mining in fewer locations. As a result, there are growing security concerns as a few miners dominate block discovery, especially with fewer countries allowing this activity.