Venezuela Cuts Power to Bitcoin Farms Amid Constant Blackouts
The Venezuelan Ministry of Electric Energy called to disconnect all Bitcoin mining farms from the national system. The plan has the support of the National Electric Corporation (Corpoelec) and the Public Ministry (MP) of Venezuela. According to the Ministry of Electric Energy, this disconnection “will prevent a high impact on demand, allowing us to continue offering an efficient and reliable service to all the Venezuelan people.”
The Ministry of Electric Energy, through the National Electric Corporation (Corpoelec), initiated a Special Load Control Plan together with the Public Ministry, aimed at high consumption users linked to digital mining.
“The purpose is to disconnect all cryptocurrency mining farms in the country from the National Electrical System (SEN), avoiding the high impact on demand, which allows us to continue offering an efficient and reliable service to all the Venezuelan people,” reported the ministerial office on their social networks.
Mining Farm in Maracay Raided
This week, a warehouse іn the central region оf Venezuela was raided, and 2,300 bitcoin mining machines were seized. This was followed by the Government’s announcement оf the disconnection оf all mining farms іn the country from the National Electrical System, amid an increase іn blackouts and rationing.
According tо the Venezuelan Ultimas Noticias newspaper, officials оf the National Guard and the Bolivarian National Police, along with representatives оf the Prosecutor’s Office 6 оf the Public Ministry іn Matters оf Money Laundering, were responsible оf the raid.
“The procedure іs related tо the Anti-Corruption Operation initiated by the Government іn March оf last year and which involved the capture оf the then president оf PDVSA Tareck El Aissami, the vice president оf that state-owned company, Antonio Pérez Suárez and the former national superintendent оf crypto assets Joselit Ramírez,” stated this newspaper.
In addition, the Prosecutor’s Office investigation into a huge embezzlement made tо the state oil company PDVSA through these digital platforms іs still ongoing. This occurs іn the South American country that created an official cryptocurrency, the petro, tо confront the dollar and inflation with very little success.
In view of this and other similar events, the Ministry of Electric Energy has reported on the implementation of a control plan for large energy consumers. The objective, the authorities assured, is to disconnect from the precarious National Electrical System, which experienced a national five-day blackout in 2019, all virtual currency farms to avoid “the high impact on demand.”
Cryptocurrency Mining in Venezuela: What’s Next?
In recent years, cryptocurrency mining activity has generated an increase in the so-called mining farms, most of them located in the interior of the country, where there are serious service difficulties due to the low transmission of electrical energy generated, among others. factors, due to the low investment in the National Electrical System.
Since long before the 2019 mega blackout in Venezuela, the population has suffered from constant electricity failures and outages. Given this, the response of the Venezuelan government is to ratify the application of restrictions on the mining of crypto assets, based on its concern for the stability of the National Electrical System, as well as with the intention of putting an end to the “free” consumption of electricity by the miners.
All in all, the measure raises uncertainties about the future of Bitcoin mining in the country.
By Audy Castaneda