Venezuela Bans Crypto Mining After Power Demand Hits 9-Year High

On May 7, Venezuela’s government issued an emergency bulletin reporting electricity demand at 15,579 megawatts, the highest level in nine years, and ordered a nationwide ban on cryptocurrency mining. Officials launched a supervision plan to locate and punish illegal miners.

The Ministry of Popular Power for Education and state utility Corpoelec said technical teams will be deployed to stabilize the grid and carry out oversight. The ministry added the goal is to disconnect all cryptocurrency mining farms from the National Electric System (SEN) to reduce pressure on demand.

Authorities have carried out seizures and disconnections in recent years. Officials reported about 2,000 mining machines were seized in Maracay, and regulators issued a broader disconnection order in May 2024.

“The absolute ban on digital mining in the national territory is upheld. Those who illegally use this activity will be sanctioned as the law establishes,” the government communiqué said.

Cheap, heavily subsidized electricity attracted miners to Venezuela. State pricing has long charged consumers well below the true cost of power, creating incentives for commercial and home-based operators to run energy-intensive Bitcoin rigs that operate around the clock. Mining provided a way for some Venezuelans to earn hard currency as the bolívar lost value.

The national grid has experienced chronic underinvestment and maintenance shortfalls. The Guri hydroelectric complex and other facilities suffered damage after years of limited upkeep; a failure at Guri in March 2019 left large areas without power for several days. More than seven million Venezuelans have emigrated since 2015, reducing the pool of experienced technicians available to maintain hydroelectric and transmission systems.

The government blamed international sanctions and external actors for some grid problems and said it will work with private, industrial, academic and scientific sectors on a long-term plan. Officials also reported that international suppliers have demanded advance payment guarantees for repairs and spare parts, complicating procurement given constrained state finances.

Local officials urged residents to report suspected mining activity. Carabobo Governor Rafael Lacava asked citizens to notify authorities if they suspected a household was running a mining farm, saying, “If you see a house that you know is mining crypto, tell that person to turn off the farm, or just report it.”

Authorities framed enforcement as a measure to protect consumers and help stabilize supply. Critics said removing miners alone will not address shortages of parts, spare funds or trained staff needed to run and maintain the grid.