Venezuela has joined the growing list of countries banning crypto mining due to its substantial energy consumption. According to local news outlet AlbertoNews, the Ministry of Electric Power plans to disconnect crypto-mining companies from the national power grid (Sistema Electrico Nacional, SEN).

The Venezuelan government aims to control excessive energy use through this ban, ensuring a stable power supply for the local population. This move is part of a broader strategy to provide efficient and reliable electricity across the nation, which has been struggling with power stability for over a decade.

Recent Anti-Corruption Efforts

The ban follows the recent seizure of 2,000 cryptocurrency mining devices in Maracay, part of an anti-corruption drive. Venezuela’s National Association of Cryptocurrencies confirmed the ban in a May 18 X post. These efforts are part of a larger initiative that has seen the arrest of several high-ranking officials and aims to curb illegal activities within the country.

Venezuela has faced an ongoing power crisis since 2009, with conditions worsening due to massive blackouts in 2019 that left towns and cities without electricity for over a week. These frequent outages have severely impacted residents’ daily lives and the overall economy. The government believes that restricting energy-intensive crypto mining operations is essential to stabilize the country’s power supply.

Global Context of Crypto Mining

Cryptocurrency mining requires substantial electricity, leading countries like China and Kazakhstan to impose strict regulations or outright bans to protect their power grids. Venezuela’s crackdown on crypto mining is seen as a necessary step to prevent further strain on its already fragile energy infrastructure.

Rafael Lacava, the governor of Carabobo state, has highlighted the importance of public collaboration in identifying illegal mining operations. He encourages citizens to report any suspicious activities to ensure that illegal mining does not contribute to power shortages.

Ongoing Power Grid Issues

Experts attribute Venezuela’s power crisis to poor maintenance and inadequate investment in the power grid. The government, however, blames sabotage and has promised to modernize the state-controlled power network to improve reliability and efficiency.

This recent ban is not Venezuela’s first action against crypto mining. Last September, authorities seized Bitcoin mining machines from a gang-controlled prison along with weapons, deploying over 11,000 soldiers in the raid. Additionally, in March, regulators suspended Bitcoin mining operations following investigations into an alleged corruption scheme involving cryptocurrency wallets used to redirect funds from the state-run oil company, Petróleos de Venezuela SA (PDVSA).

Venezuela’s crackdown on crypto mining is a significant step in addressing the country’s severe energy crisis. By reducing the strain on the national power grid, the government aims to provide more stable and consistent electricity to its citizens while continuing its efforts to combat corruption and illegal activities within the country.