Venezuela Shuts Down Crypto Mining Farms

Venezuela’s Ministry of Electric Power announced it will disconnect all cryptocurrency mining farms from the national power grid (SEN). This measure aims to reduce high energy consumption by these farms and ensure a reliable electricity supply for citizens. The announcement was reported by local media outlet AlbertoNews on May 18.

“The purpose is to disconnect all cryptocurrency mining farms in the country from the SEN [National Electrical System], avoiding the high impact on demand, which allows us to continue offering an efficient and reliable service to all the Venezuelan people,” the Ministry stated on Instagram. This decision comes after the government seized 2,000 cryptocurrency mining machines as part of an anti-corruption campaign that led to the arrests of several officials from state institutions.

The National Superintendency of cryptoassets (Sunacrip) is undergoing restructuring following the arrest of Superintendent Joselit Ramírez. Ramírez is linked to Tareck El Aissami, the former Petroleum Minister and ex-president of Petróleos de Venezuela (PDVSA), who faces charges of treason, embezzlement, misuse of influence, money laundering, and criminal association.

Venezuela has been struggling with an electricity crisis since 2009, worsened by severe blackouts in 2019 that left cities without power for up to seven days. Frequent outages have impacted the quality of life and economic activities. Rafael Lacava, Governor of Carabobo state, confirmed restrictions on cryptocurrency mining farms due to their high electricity consumption and urged residents to report illegal mining operations.

“If you, neighbor, see a house that you know, tell that person to turn off the farm, or else report it, because when they turn off the light you have to give light to a man so that he can earn some reales (money), you are left without electrical service,” stated Lacava.

Experts cited by AlbertoNews attribute the crisis to poor maintenance and lack of investment in the power grid, while the government blames sabotage and promises to modernize the state-controlled power network.

Bitcoin and cryptocurrency mining are known for high energy use. Countries like China and Kazakhstan have banned mining to protect their power grids, centralizing mining in fewer locations, which raises security concerns as a few miners dominate block discovery.

Venezuela's move to shut down mining farms aims to ease the burden on its fragile power infrastructure and aligns with global efforts to manage the environmental impact of cryptocurrency mining. The shutdown is part of Venezuela’s broader anti-corruption campaign. The recent seizure of 2,000 mining machines and the arrests of officials show the government’s commitment to tackling corruption within the sector.

The future of cryptocurrency mining in Venezuela is uncertain. With new restrictions, mining activities may decline, but the government’s promise to modernize the power grid could eventually lead to more sustainable mining practices.

Venezuela’s actions are part of a global discussion on the sustainability and regulation of cryptocurrency mining. As countries impose bans and explore regulations, the landscape of crypto mining evolves. Venezuela’s decision may influence other nations facing similar energy challenges.

Venezuela’s plan to disconnect crypto mining farms aims to address the energy crisis and improve service reliability for citizens. This move is part of the government’s anti-corruption efforts and plans to modernize the power grid. As the global community addresses the high energy demands of crypto mining, Venezuela’s actions reflect a significant step towards managing this industry.