overview:
• Venezuela will cut off power to all cryptocurrency mining farms in the national electricity system.
• The authorities cut off power supply due to excessive energy consumption and resulting power outages.
• The measure is mainly aimed at miners who do not pay their electricity bills.
Venezuela’s Ministry of Electricity has announced plans to disconnect all cryptocurrency mining farms from the National Electricity System (SEN).
The announcement, which affects all miners relying on the national grid, was made public on the Ministry of Power’s official Instagram account.
How will the plan affect Venezuela’s cryptocurrency mining industry?
Venezuela’s state power company Corpoelec and the Public Ministry (MP) support the plan. The country’s authorities have urged restrictions on power supply to cryptocurrency mining farms, including Bitcoin.
The government claims that this measure is due to concerns about the stability of the country's electricity system. In addition, they aim to end the "free" electricity consumption of miners.
The government claimed that it took this step because of concerns about the stability of the country's power system. At the same time, the government also plans to stop miners from using electricity for free.
The urgency of the restriction was highlighted by Carabobo state governor Rafael Lacava, who, along with Electricity Minister Jorge Márquez, called for a reduction in activity at these data centers, according to local media.
“Neighbors, if you see any suspicious mining operations, please ask them to stop or report them to us. This is because they are illegally occupying electricity for profit, which prevents you from using electricity normally,” Lacava said.
The Venezuelan government justified the power outages by citing the high electricity consumption required by these cryptocurrency mining farms. The government claimed that these mines also caused frequent power outages in surrounding areas. In addition, the government reiterated its intention to ban illegal cryptocurrency mining.
“This outage will avoid a significant shock to electricity demand and allow us to continue to provide efficient and reliable service to all Venezuelans,” the Ministry of Electricity said.
While the Venezuelan government has ordered a halt to cryptocurrency mining on the national grid, it is unclear whether miners that do not rely on the grid will be able to continue operating as they also face restrictions. In March 2023, Venezuelan regulators ordered a nationwide moratorium on cryptocurrency mining after launching an investigation into a major corruption scheme.
The scheme allegedly illegally transferred funds that were supposed to be paid to the state-owned Petroleos de Venezuela (PDSVA) through cryptocurrency wallets. Meanwhile, several members of Venezuela’s National Supervisory Service for Cryptocurrency and Related Activities (SUNACRIP) have been arrested for corruption.
Conclusion:
The Venezuelan government has decided to cut off cryptocurrency mining farms from the national power grid to deal with high energy consumption and prevent power system instability. The move mainly affects miners who do not pay their electricity bills, and the government also stressed its determination to crack down on illegal mining activities.
Despite the uncertainty, especially for miners who do not rely on the national grid, the government has indicated that it will prioritize ensuring stable electricity services to citizens.
In addition, the corruption investigation and arrest of members of the regulatory body SUNACRIP further highlight the importance of regulation in the cryptocurrency mining sector. This series of actions may push the mining industry towards more compliance and energy-saving. #委内瑞拉 #切断矿场电源
