Just last month, Venezuela had just banned crypto mining operations in any state-owned housing or neighborhoods that are part of the “Gran Misión Vivienda” project. Now, a decree published by the regulators in the nation mandates that all Bitcoin mining operations be operated on a national pool, along with other regulations in place.
The nation has been battling hyperinflation for years, and as a result, the locals turned towards cryptocurrencies to survive. This also led to the growth and development of the crypto mining industry in the nation, which in turn gave rise to illegal mining activities.
Venezuela’s cheap electricity and inflationary economic policies have made it one of the global hotspots for crypto mining.
However, this seems to be coming to an end as the report from local media outlet Criptonoticias notes that the new decree authorized by Joselit Ramirez, head of National Superintendency of Crypto Assets and Related Activities (SUNACRIP), aims to legalize crypto mining.
Besides legalizing crypto mining, the new decree also aims at centralizing the whole process and hand power to the regulators. Under this decree, ASIC manufacturing, mining farm construction, the import of equipment, and the distribution of funds will all be regulated under the law.
A spate entity dubbed Registry of Miners (RIM) has also been established to handle all the licensing processes via the web.
From equipment manufacturers to those involved in constructing mining farms, every entity involved must acquire a license to operate in the nation or risk heavy penalties. All crypto mining activities must also be carried out on an official National Digital Mining Pool.
A controversial government
According to local crypto miners, the registry is a reason for concern amidst the locals as disclosing one’s income and activity has often attracted the attention of bad actors and corrupt government officials. Some local miners have even complained about extortion attempts.
The Venezuelan government has been involved is several controversies, and corruption has crept up to the highest levels in the system.
Earlier this year, the U.S. Department of Justice even alleged that the nation’s president Nicolas Maduro of concealing transactions related to illicit drug-running using cryptocurrencies.
The fact that Venezuela is trying to centralize the mining of Bitcoin is something that goes against the core principles of the number one cryptocurrency.
Centralized mining also means that the regulators will be able to control any income earned from the pool’s combined mining rewards, as well as the payout process for contributors. The authorities will also have to power to delay miners’ payments or levy any taxes before payments have been made.