Venezuela cracks down on cryptocurrency mining

The decision reverses an announcement in January, when Cryptocurrency Superintendent Carlos Vargas said that mining was legal.

The Venezuelan government has intensified its actions against cryptocurrency mining, warning that all shipments of cryptomining devices into the country will be seized – a measure that follows a police clampdown on major mining operations across the nation.

Apparently, however, there’s documented evidence that Venezuela is only allowing the import of mining equipment from China. According to a press release, the government authorised China’s Bitmain to ship mining devices to local company Corporación CriptoSoft.  Vargas said that as long as people and companies have government approval, they can import mining equipment. But media reports state police are actively searching for and seizing all equipment used for mining.

The South American country, which has become an important centre for mining due to practically-free electricity and for cryptocurrency transactions due to hyperinflation nearing 16,000% and devaluation of their fiat currency to about 900,000 a dollar, began confiscating equipment used for mining late last year.

In February, the founder of non-profit, Randy Brito, said: “There must be tens of thousands of people mining in Venezuela. People that are earning cryptos, either mining or working, usually use them to buy abroad — they buy food, medicine, car parts, other machinery parts; but the most common thing people buy are foreign currencies in other platforms where they can load cards that they can use to buy on Amazon and other stores that only accept cards and not cryptos directly.”

In April of this year, shipping companies in the capital Caracas announced suspension of all import of Bitcoin mining devices, smart phones, electronic equipment, and all computer parts and devices, in a measure aimed at clamping down on the increasing number of cryptocurrency miners, who have turned to this activity as a means to survive in a country where minimum wage is $4.11 a month. Also in April, various cryptocurrency exchanges reported that conversions from the local currency Bolivar to Bitcoin had increased to $1 million a day.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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