Venezuela’s Ministry of Electric Power made public its decision to disconnect all cryptocurrency mining facilities from the national power grid (SEN, Sistema Electrico Nacional). The move aims to regulate the substantial energy demand generated by these mining facilities and to ensure consistent service for citizens. The announcement, disclosed by local media outlet AlbertoNews on May 18, conveyed the ministry’s intention to disconnect all cryptocurrency mining facilities nationwide from the SEN [National Electrical System], thereby mitigating their considerable impact on energy demand. This action is aimed at sustaining an efficient and dependable service for all Venezuelan citizens, as stated by the Ministry on its Instagram account.
This decision came in the wake of the confiscation of 2,000 cryptocurrency mining machines within the country, which is part of the government’s ongoing anti-corruption drive, resulting in the arrest of numerous officials from state institutions. Notably, the National Superintendency of Cryptoassets (Sunacrip) has been undergoing restructuring since the apprehension of Superintendent Joselit Ramírez, who has links to Tareck El Aissami, the former Petroleum Minister and president of Petróleos de Venezuela (PDVSA). El Aissami himself faces charges of treason, embezzlement, abuse of power, money laundering, and criminal conspiracy.
Venezuela has grappled with persistent electricity shortages since 2009, exacerbated by extensive blackouts in 2019 that plunged cities into darkness for up to seven days, adversely impacting the country’s standard of living and economic operations. Consequently, Rafael Lacava, Governor of Carabobo state, confirmed limitations on cryptocurrency mining facilities due to their significant electricity consumption. He urged residents to report illicit cryptocurrency mining activities to prevent power deficits, emphasizing the importance of conserving electricity for essential purposes.
Experts, as reported by AlbertoNews, attribute the electricity crisis to inadequate maintenance and insufficient investment in the power grid. Meanwhile, the government attributes the situation to sabotage and has pledged to modernize the state-controlled power infrastructure. Globally, Bitcoin (BTC) and cryptocurrency mining are notorious for their substantial energy consumption. Countries such as China and Kazakhstan have prohibited the practice to safeguard their power systems, concentrating mining activities in fewer locations. Consequently, as fewer countries permit cryptocurrency mining, concerns regarding security heighten, with a handful of miners dominating block discovery.
