Crypto Mining Farms to Lose Power in Venezuela

Venezuela’s Ministry of Electric Power has announced a plan to disconnect all crypto mining farms that feed into the National Electric System (SEN).

This announcement, which affects all miners that operate with national electricity, was publicly shared on the ministry’s official Instagram page.

How Will The Plan Impact the Crypto Mining Industry in Venezuela?

Venezuela’s National Electric Corporation (Corpoelec) and the Public Ministry (MP) support the plan. The country’s authorities have urged restrictions on the power supply to crypto mining farms, including those for Bitcoin.

The government claims the measure is due to concerns over the stability of the national electrical system. Moreover, they aim to end miners’ “free” electricity consumption.

Read more: An Introduction to Free Bitcoin Mining

Local media reported that Rafael Lacava, the governor of Carabobo state, emphasized the urgency of this restriction. Along with the Minister of Electrical Energy, Jorge Márquez, Lacava called for a reduction in the activity of these data centers.

“If you, neighbor, see a house you recognize, tell that person to turn off the farm, or report it, because when they cut off the power to give electricity to someone so they can make some money, you end up without electrical service,” Lacava said.

The Venezuelan government justifies the disconnection of crypto mining farms due to the high electrical consumption that these facilities require. The government alleged they have also caused recurring power failures in the surrounding areas. Additionally, the government reaffirms its intention to prohibit clandestine crypto mining.

“[This disconnection] will avoid the high impact on demand, allowing us to continue offering an efficient and reliable service to all the Venezuelan people,” the Ministry of Electric Power stated.

However, it remains to be seen whether crypto miners operating without the national electrical system can continue, as they have also faced restrictions. In March 2023, Venezuelan regulators ordered a halt to crypto mining after launching an investigation into a major corruption scheme.

Read more: Bitcoin Mining From Home: Is It Possible in 2024?

This scheme allegedly involved using crypto wallets to divert payments owed to the state-run oil company Petróleos de Venezuela SA (PDSVA). At the same time, numerous individuals in Venezuela’s cryptocurrency oversight body, Superintendencia Nacional de Criptoactivos y Actividades Conexas (SUNACRIP), were arrested on corruption charges.