Venezuela Prohibits All Cryptocurrency Mining Operations to Avert Power Grid Strain

• Venezuela has prohibited all cryptocurrency mining operations within its borders as it could no longer overlook the effects of crypto mining on the country’s energy resources.

The national power grid of Venezuela is experiencing significant strain due to rising demands.

The government has initiated measures against high-energy-consuming activities such as crypto mining to ease the burden on the power grid.

The administration has enforced a ban on all crypto mining to manage the nation’s power grid.

Crypto mining had become a source of hope for many facing Venezuela’s soaring inflation and economic turmoil. With electricity prices among the lowest globally, crypto mining provided a refuge for individuals and businesses seeking financial stability.

However, as the appeal of crypto mining increased and more Venezuelans began investing in digital assets, the pressure on the national power grid became evident.

Confronted with this situation, the government could no longer disregard the consequences for the nation’s energy resources, leading to a regrettable yet necessary action.

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Venezuela Bans Crypto Mining

In light of Venezuela’s ongoing energy shortages and infrastructure issues, the Venezuelan National Power Ministry revealed intentions to disconnect all Bitcoin and crypto mining operations from the national grid.

The agency stated that it sought to control excessive energy usage by prohibiting all crypto mining farms in the country from accessing the national grid.

Leading this effort, Rafael Lacava, the governor of Carabobo, has undertaken a series of decisive actions resulting in the confiscation of over 11,000 ASICs and the closure of multiple mining farms.

Governor Lacava has also encouraged public involvement in identifying illegal crypto mining activities, urging citizens to report any illicit operations.

Lacava highlighted that these actions were crucial for stabilizing the national power grid and ensuring reliable service for citizens, particularly since the country has been facing persistent blackouts since 2019, which have significantly impacted overall economic activity.

While officials have not yet specified the long-term nature of these measures, Governor Lacava cautioned that the national grid would disconnect additional bitcoin farms and implement further actions, including the announcement of a national executive order aimed at reducing energy consumption among state agencies in the coming days.

In March 2023, Venezuela’s energy provider shut down crypto mining operations nationwide as part of corruption investigations linked to the state oil company.

A recent enforcement action in Venezuela resulted in the seizure of 2,000 crypto mining ASICs in Maracay as part of an anti-corruption campaign.

Crypto mining had served as a crucial support for many Venezuelans dealing with rampant inflation and instability. Nevertheless, this support came with challenges—frequent blackouts and energy shortages.

While the ban seeks to restore stability to Venezuela’s energy system, it presents a challenge for those reliant on crypto mining for their income.

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