On Saturday, May 18, the Venezuelan Ministry of Popular Power for Electric Energy (MPPPE) announced a special project in cooperation with the national power company aimed at disconnecting all domestic cryptocurrency mining farms from the national power grid (SEN) in response to the energy crisis. It is reported that over 11,000 mining machines have been seized by the authorities.
According to Dialogue Earth, after China implemented a ban on Bitcoin and cryptocurrency mining in 2021, many miners sought new locations. Venezuela and Paraguay attracted miners who could no longer operate in China, with Argentina potentially becoming a global Bitcoin mining destination.
However, Venezuela has now made a complete policy reversal.
According to a Bitcoin.com reporter based in Venezuela, in line with the latest cryptocurrency mining ban announced by the Ministry of Electric Energy, Rafael Lacava, the governor of the industrial state of Carabobo, led a series of raids on cryptocurrency mining farms over the weekend. This resulted in the seizure of more than 11,000 ASIC mining machines and the disconnection of an unspecified number of cryptocurrency mining farms from the power supply.
The latest measures by the Venezuelan Ministry of Electric Energy are related to the anti-corruption actions initiated by the Venezuelan government last year. Since 2023, dozens of officials from the Venezuelan state oil company (PDVSA) and the National Superintendence of Cryptoassets (Sunacrip) have been arrested on corruption charges.
Sunacrip is still undergoing restructuring, which has led to the forced closure of cryptocurrency mining farms in several states and the ordered cessation of operations for some crypto exchanges.
Local media AlbertoNews reported that one of the main reasons for the large-scale seizure of cryptocurrency mining machines and the disconnection of mining farms is to address the country's ongoing power crisis, which has persisted since 2009. A major blackout in 2019 left some cities without power for up to seven days, and frequent blackouts over the years have severely affected the quality of life and economic activities in the country.
According to some experts, Venezuela's power shortage crisis is due to a lack of maintenance and investment in the national grid. However, the authorities partly blame the cryptocurrency mining business for consuming excessive energy from the grid, and they have prioritized targeting cryptocurrency mining farms.
Rafael Lacava, the governor of Carabobo state who seized over 10,000 mining machines, emphasized on social media over the weekend that efforts will continue to disconnect these power-consuming mining machines from the national grid. He also urged residents to report illegal cryptocurrency mining activities to prevent power shortages.
Notably, in 2020, Venezuela made several attempts to bypass U.S. economic sanctions using cryptocurrencies, even with the military joining the ranks of Bitcoin miners by announcing the official launch of a "Bitcoin Mining Center."
However, it now appears that in order to resolve the national energy dilemma, Bitcoin mining is once again becoming a restricted activity locally.
In addition to Venezuela in South America, the Chinese Embassy in Angola also reminded on its WeChat public account in April that Angola's "Prohibition of Cryptocurrency and Other Virtual Asset Mining Law" officially came into effect on April 10. The embassy reminded Chinese citizens in Angola that engaging in virtual currency "mining" is a criminal activity.
According to the announcement, the Chinese Embassy in Angola stated that the new Angolan law stipulates that cryptocurrency mining is a criminal offense, and those who possess information, communication, and infrastructure equipment for virtual currency "mining" activities will be sentenced to 1 to 5 years in prison and have their equipment confiscated.
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