Venezuela Legalizes Crypto Mining but Will Force Industry Into National Pool

The Venezuelan agency responsible for regulating cryptos has legalized the mining industry, but in the process mandated it be centralized under government control.

AccessTimeIconSep 23, 2020 at 1:30 p.m. UTC
Updated Sep 14, 2021 at 9:59 a.m. UTC
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Venezuela's government has given cryptocurrency miners mixed news this week.

  • Firstly, the government department responsible for regulating cryptos has legalized the mining industry, local industry news site CriptoNoticias reported Tuesday.
  • The new decree was published in the Official Gazette on Monday and authorized by by Joselit Ramirez, head of National Superintendency of Crypto Assets and Related Activities (SUNACRIP).
  • It states that any local entity wishing to mine cryptos must apply for a license and be listed on a government register.
  • Applicants will need to hand over information to the authorities on the nature of their mining activities and keep their mining-related records for 10 years.
  • Manufacturers of mining equipment or mining data centers will be able to apply for a special license, according to the report.
  • The importing and manufacturing of mining equipment will be supervised by Venezuelan authorities.
  • Unusually, all mining activities must be carried out through an official National Digital Mining Pool, with those who operate outside it to face penalties.
  • Centralizing mining in this way will mean the government is able to control any income earned from the pool's combined mining rewards, as well as paying out to contributors.
  • Thus the government could potentially freeze or delay miners' payments or levy any taxes before payments have been made, says CriptoNoticias.
  • Venezuela's economy has been suffering from economic mismanagement and international sanctions led by the U.S.
  • Its president, Nicolas Maduro, has previously launched a purportedly oil-pegged crypto token called the petro in an attempt to bring in much-needed foreign currency.
  • The U.S. Department of Justice alleged earlier this year that Maduro had used cryptocurrency to conceal transactions related to illicit drug-running, though it did not specify if the petro was involved.
  • SUNACRIP's Ramirez is also wanted by the U.S government on charges of corruption and links to the narcotics trade.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.


Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.