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Venezuela to Shut Down Cryptocurrency Mining Farms
Venezuela’s Ministry of Electricity has announced that it will disconnect everything cryptocurrency mining agricultural companies from the national electricity grid (SEN, Sistema Electrico Nacional). The measure aims to control the high energy demand from these mining farms and ensure a reliable service to citizens.
AlbertoNews, a local media, reported the announcement on May 18th
“The aim is to disconnect all cryptocurrency mining farms in the country from the SEN [National Electrical System]avoiding the strong impact on demand, which allows us to continue to offer an efficient and reliable service to all the Venezuelan people”,
the ministry reported on his Instagram account.
Notably, the announcement followed the kidnapping of 2,000 people cryptocurrency mining machines in the country. This action is part of the government’s ongoing anti-corruption campaign. This led to the arrest of several officials of state institutions.
Corruption with the National Superintendence of Cryptoassets
The National Superintendency of Cryptocurrencies (Sunacrip) has been subjected to a restructuring committee since the arrest of superintendent Joselit Ramírez. Ramírez has ties to Tareck El Aissami, former oil minister and former president of Petróleos de Venezuela (PDVSA).
In that note, El Aissami was accused of treason, embezzlement, abuse of influence, money laundering and criminal conspiracy.
Venezuela’s power grid problems and cryptocurrency mining
Venezuela faces an ongoing electricity crisis since 2009, worsened by massive blackouts in 2019 that left cities without electricity for up to seven days. Frequent power outages have negatively affected the country’s quality of life and economic activities.
Therefore, the governor of Carabobo state, Rafael Lacava, confirmed restrictions on cryptocurrency mining farms due to their significant electricity consumption. He urged residents to report illegal cryptocurrency mining operations to prevent energy shortages.
“If you, a neighbor, see a house you know, tell that person to turn off the farm, or report it, because when they turn off the light, because you have to give the light to a man so that he can earn something reales (money), you are left without electrical service”.
– Raffaello Lacava
As reported by AlbertoNews, experts attribute the crisis to poor maintenance and inadequate investments in the electricity grid. Meanwhile, the government blames sabotage and has promised to modernize the state-controlled electricity grid.
Overall, Bitcoin (Bitcoin) and cryptocurrency mining are known worldwide for their high energy consumption. Countries such as China and Kazaquistan have banned the activity to preserve their electricity grids, centralizing mining in fewer locations.
Therefore, the fewer countries that allow this activity, the higher the price will be there will be security issues, as some miners dominate the discovery of blocks.