Venezuela Enforces Ban on Crypto Mining Amid Energy Crisis

According to local news outlet AlbertoNews, Venezuela's Ministry of Electric Power intends to disconnect cryptocurrency mining companies from the national power grid, SEN (Sistema Electrico Nacional).
The government is taking this step to manage excessive energy use and ensure a reliable power supply for the population.

Venezuela’s National Association of Cryptocurrencies confirmed the ban on crypto mining in a post on X dated May 18. This announcement comes after authorities recently confiscated 2,000 cryptocurrency mining devices in Maracay as part of an anti-corruption operation.

The Electric Ministry stated that it is necessary to reduce the strain on the national grid caused by high-energy-consuming mining companies to maintain efficient and stable electricity service throughout Venezuela.

Officials believe these measures are crucial to stabilize the country's power supply, which has been inconsistent for the past ten years.

Since 2009, Venezuela has been enduring a prolonged power crisis, exacerbated by severe blackouts in 2019 that left numerous towns and cities without electricity for over a week. These frequent power outages have significantly disrupted daily life and the economy.

Due to the high electricity demands of cryptocurrency mining, countries like China and Kazakhstan have imposed stringent regulations or outright bans to safeguard their power grids, centralizing mining in fewer locations.

The Venezuelan government’s crackdown on cryptocurrency mining is part of a broader anti-corruption initiative that has resulted in the arrest of several top officials.

Joselit Ramírez, the former head of the National Superintendency of Cryptoassets, is a central figure in the corruption charges.

Rafael Lacava, governor of Carabobo state, highlighted the need for public support in identifying illegal mining operations and urged citizens to report any illicit activities:

“If you, a neighbor, see a house involved in this, tell them to turn off the mining equipment, or report it. When the power is cut off, you lose electricity because someone else is illegally making money.”

Experts cited by AlbertoNews attribute the crisis to inadequate maintenance and investment in the power grid, whereas the government blames sabotage and has vowed to modernize the state-controlled power network.

This isn't Venezuela’s first action against crypto mining. Last September, authorities seized Bitcoin mining equipment from a gang-controlled prison, alongside weapons, during a raid involving over 11,000 soldiers.

In March, Venezuelan regulators halted Bitcoin mining operations following investigations into a corruption scheme involving cryptocurrency wallets used to divert funds from the state-run oil company, Petróleos de Venezuela SA (PDVSA).