Bitcoin Mining Companies In Venezuela Have To Close Because Of Cash Shortage

Key Points:

• Venezuela’s temporary ban on mining cryptocurrencies within the country is slowly killing the industry.
• Many cash-strapped miners could be forced to close down permanently.
• Not only in Venezuela, mining companies based in the US are also facing many legal difficulties.

According to Bloomberg, Venezuela’s temporary ban on cryptocurrency mining inside the nation is basically putting an end to a sector that President Nicolás Maduro has worked hard to develop.

Maduro has personally advocated for the usage of cryptocurrency, notably the government-issued Petro sovereign coin. The currency was marketed as a viable alternative to the Venezuelan bolivar in the midst of hyperinflation, as well as a means of evading punishing American sanctions.

Nevertheless, as the state’s ban on crypto mining enters its third month, many cash-strapped miners may be forced to shut down permanently. And the Petro, which never took off but was once seen as Venezuela’s future gateway by Maduro, ceased trading on May 24.

After starting an inquiry into a major corruption operation in which crypto wallets were reportedly used to divert payments owing to the state-run oil giant Petróleos de Venezuela SA, state officials initially put a stop to crypto mining in March. Mining organizations believe that 75,000 mining equipment units have been disconnected. It is about the equivalent of a large publicly listed mining company’s complete fleet of equipment, such as Riot Platforms Inc.

Over 80 persons have been detained in relation to the oil crisis, in which Venezuelan petroleum was reportedly sold without paying payments to PDVSA via the country’s crypto monitoring body. Former technology minister Hugbel Roa, who was instrumental in pushing the Petro, and Joselit Ramrez, who oversaw the crypto superintendence, are among those named. Yet, it is unclear why the crypto mining restriction remains in place, given that the great majority of miners are focused on Bitcoin and have nothing to do with the Petro since the tokens are 100% “pre-mined” by the government.

Not only in Venezuela, mining companies based in the United States are also facing many legal difficulties. Bitcoin miners have stopped operations or reduced power consumption due to soaring electricity rates in Texas, USA. Texas Power Trouble Affects Bitcoin Mining Indicators The state of Texas, USA, is called the holy land of cryptocurrency miners because there are many Bitcoin miners.

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Harold

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