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Mining Operations for Cryptocurrencies Will Be Shut down in Venezuela

Phillip Bryant

ByPhillip Bryant

May 18, 2024
Mining Operations for Cryptocurrencies Will Be Shut down in Venezuela

According to the Ministry of Electric Power of Venezuela, all cryptocurrency mining farms in the country will now be disconnected from the national power grid, also known as SEN. The objective of the measure is to maintain a consistent level of service for the general population while simultaneously bringing under control the enormous amount of energy that these mines consume.

AlbertoNews, a local media outlet, broke the news on May 18.

“Our goal is to separate all cryptocurrency mining facilities in the country from the SEN [National Electrical System], preventing any significant strain on the power grid. This ensures that we can maintain an efficient and dependable service for all the people of Venezuela,”

– Ministry of Electric Power

A significant event within the country led to the proclamation, which was prompted by the seizure of 2,000 cryptocurrency mining machines. This action is an essential component of the government’s continuing efforts to combat corruption. As a result, numerous individuals associated with state institutions were apprehended.

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The National Superintendency of Cryptoassets Has Been Compromised Due to Corruption

Following the arrest of Superintendent Joselit Ramírez, Sunacrip, an acronym for the National Superintendency of Cryptoassets, has undergone a reorganization process. Tareck El Aissami, who served as both the Minister of Petroleum and the head of Petróleos de Venezuela (a PDVSA firm), has connections to Ramírez.

The allegations against El Aissami go far further, including treason, embezzlement, power abuse, money laundering, and criminal association involvement.

Mining of Cryptocurrencies and Problems With Venezuela’s Power Grid

Since 2009, Venezuela has been struggling with an ongoing electricity crisis. Widespread blackouts in 2019 have left cities without power for as long as seven days, which has further exacerbated this crisis. The frequently occurring power outages have had a significant impact on the quality of life and economic activities across the nation.

Governor Rafael Lacava of Carabobo State has made an official announcement regarding the imposition of restrictions on the operations of cryptocurrency mining farms. This decision was made due to the excessive amount of electricity these farms consume. To reduce the likelihood of power outages, he urged locals to report any instances of cryptocurrency mining that were carried out without authorization.

“If you happen to notice a familiar house with its lights still on, kindly inform the occupant to switch off their electricity. Alternatively, you may report the matter, as leaving lights on unnecessarily can result in a disruption of electrical service, which can be inconvenient for everyone involved.”

– Rafael Lacava

According to AlbertoNews, experts have stated that the power grid’s lack of funding and maintenance is what is causing the crisis. During this time, the government has indicated that it believes the incident to have been the result of intentional sabotage and has pledged to improve the power grid that is under state control.

Bitcoin (BTC) and cryptocurrency mining have gained recognition worldwide due to the significant amount of energy they consume. Certain countries, including China and Cazaquistan, have made it illegal to engage in this practice to protect their power grids. As a result, mining operations have been consolidated into fewer locations.

As a consequence of this, there will be increased security concerns due to the fact that a small group of miners will control the discovery of blocks if only a limited number of countries allow this activity.

Phillip Bryant

Phillip Bryant

Phillip Bryant, an esteemed writer in the financial field, imparts his extensive knowledge of currency markets to the readers of Main Crypto News. With a wealth of experience in international finance and a keen sense of market trends, Bryant offers timely and perceptive analysis of foreign exchange, keeping readers well-informed.

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