Venezuela Bans Crypto Mining To Stabilize National Electricity Supply

Venezuelan Attorney General Tarek William Saab, (photo: x @TarekWiliamSaab)

JAKARTA - The Venezuelan government has joined several countries that oppose crypto mining due to the high demand for electricity needed.

According to reports from local media, Venezuela's Ministry of Electricity revealed plans to cut off cryptocurrency mining fields from the national power grid. The move aims to regulate excessive energy consumption and ensure a stable electricity supply for residents.

A post from the Venezuelan National Association of Cryptocurrencies on platform X states that crypto mining is prohibited in Venezuela.

The move follows recent action involving the confiscation of 2,000 cryptocurrency mining devices in the city of Maracay as part of an anti-corruption initiative.

The ministry stressed the importance of providing efficient and reliable electricity services across Venezuela by removing the burden caused by these high-energy mining fields. According to officials, these measures are important for stabilizing the unstable national electricity supply over the past decade.

The country has experienced repeated power outages, especially since 2019, which significantly impacts the daily lives of the population and economic activity as a whole.

Cryptocurrency mining has very high electricity demand. In response, several countries such as China and Kazakhstan have implemented strict regulations or total bans on these practices.

The Venezuelan government's move towards cryptocurrency mining is reportedly part of a larger anti-corruption push, which has led to the arrest of several high-ranking officials. Joselit Ramturez, the former head of the National Superintenency on Crypto Assets, is a key figure in the corruption charge.

The governor of Carabobo state, Rafael Lacava, reportedly highlighted the importance of public collaboration in detecting illegal mining operations, encouraging citizens to report unlawful activities.

However, this is not Venezuela's first action against crypto mining activities. In March 2023, Venezuela's energy supplier closed crypto mining facilities across the country as part of a corruption investigation involving state oil companies.

Venezuelan Attorney General Tarek William Saab said at the time that government officials were suspected of carrying out parallel oil operations with the help of the national crypto department.

Elsewhere, in 2023, eight major cryptocurrency mining operators in Kazakhstan signed an open letter to President Kassym-Jomart Tokayev, complaining of high energy prices for crypto miners.