Cryptocurrency mining has grown to become a billion-dollar industry, with new miners joining every day. In the past, we have seen regulators across multiple nations take steps to promote development in the mining industry, but this is not the case with Venezuela, which has reportedly banned cryptocurrency mining.
The nation has been plagued by hyperinflation for years, and this has resulted in the locals turning towards cryptocurrencies to survive. This has also led to the growth and development of the crypto mining industry in the nation.
However, according to an announcement from the Venezuelan Minister of Habitat and Housing Ildemaro Villarroel on July 15, crypto mining operations won’t be allowed in any state-owned housing or neighborhoods that are part of the “Gran Misión Vivienda” project.
The Gran Misión Vivienda project is a plan by the Venezuelan government to grant housing to citizens with low income amid a long-lasting economic crisis that the country had already been facing before COVID-19 showed up.
In his official speech, the minister noted that any kind of cryptocurrency mining equipment is now banned in public housing because of its “high power consumption” and for supposedly “violating” the government’s electrical supply policy.
“In this coordinated work, we have detected the harmful effects of these elements of high electrical demand in the public houses of the Gran Misión Vivienda project.”
Villarroel claims that the crypto mining industry is harming the nation’s power supply system. However, miners in the nation have previously stated that the blackout the country has been facing wasn’t because of high consumption, and was instead due to failures in the nation’s power grid.
Miners in the nation have complained that the weak electrical system often broke the “run time” and continuity of mining operations.
Venezuela Government and crackdowns on miners
Up until now, cryptocurrency mining was ‘technically’ legal in Venezuela, but the practice was highly restricted because the profit from it is valued in U.S dollars. The regulators have often cracked down on miners and seized their mining equipment.
Most recently, The Bolivarian National Guard of Puerto Ordaz, Venezuela, seized 315 mining rigs manufactured by Bitmain after the owners of those rigs were told they didn’t have the necessary permits to own and operate these machines.
Prior to this, a report published by the Economist accused President Nicolas Maduro of using the electrical grid owned by the government to track bitcoin miners and illegally seize their mining equipment.
According to a victim of such an encounter, the equipment was supposedly being used by the corrupt officials for personal gains.