Venezuela bans crypto mining to protect power grid

The Venezuelan government has joined the list of countries that have opposed crypto mining due to its high demand for electricity.

According to a local news outlet, Venezuela's Ministry of Electricity (MPPPE) has announced plans to disconnect cryptocurrency mining farms from the national grid. The measure aims to control excessive energy consumption and guarantee stable power supply to the population.

An X post from Venezuela's National Association of Cryptocurrencies states that cryptocurrency mining is banned throughout Venezuela. The move prioritizes energy stability over the growing crypto-mining industry.

The move follows a recent crackdown on 2,000 cryptocurrency mining rigs in Maracay, Aragua state, 120 kilometers southwest of Caracas, as part of an anti-corruption drive.

The minister stressed the need to provide efficient and reliable electricity services throughout Venezuela by removing the pressure caused by these high-energy farms. According to the officials, these measures are necessary to stabilize the national energy supply, which has been unreliable for the past decade.

The country has experienced frequent power outages, especially since 2019, which have had a significant impact on residents' daily lives and overall economic performance.

Cryptocurrency mining is popular worldwide due to high electricity demand. In response, countries such as China and Kazakhstan have implemented strict regulations or bans on the practice to protect their energy infrastructure and prioritize energy supply for essential public services.

The government's crackdown on cryptocurrency mining is part of a larger anti-corruption push that has led to the arrest of several high-ranking officials. Joselit Ramirez, former head of the National Comptroller of Cryptoassets (Sunacrip), is a key figure in these corruption allegations.

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The governor of Carabobo State, Rafael Lacava, emphasized the importance of public cooperation in identifying illegal mining operations. He called on citizens to come forward and report any illegal activity and stressed that community participation plays a vital role in maintaining the reliability of their electricity supply.

However, this is not Venezuela's first step into crypto mining activities. In the year In March 2023, Venezuela's energy provider shut down crypto mining facilities nationwide to reorganize the national crypto department and investigate corruption involving the country's oil company.

Venezuela's Attorney General, Tarek William Saab, has revealed that government officials are accused of running parallel oil operations with the help of the National Crypto Department.

Last year, eight major cryptocurrency mining operators in Kazakhstan signed an open letter to President Kassym-Jomart Tokayev, complaining about high energy costs for miners.

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