State Control of Crypto Mining in Venezuela: How the Government Manages and Restricts Digital Mining

When Venezuela first launched its state-run crypto mining program, it looked like a bold solution to an economic crisis. With hyperinflation eating away at salaries and savings, the government saw cryptocurrency mining as a way to generate hard currency using the country’s cheap electricity. But what started as a promising experiment turned into a tangled mess of broken promises, shifting rules, and paralyzed agencies. Today, crypto mining in Venezuela isn’t just regulated-it’s controlled, restricted, and often suspended, depending on who’s in charge and how bad the power outages have gotten.

How the Government Took Over Crypto Mining

In 2018, Venezuela created SUNACRIP, the National Superintendence of Cryptocurrencies, to take direct control over all digital mining activity. This wasn’t just a tax agency-it was a full regulatory body with power to license, monitor, and shut down miners. The goal? To funnel all mining profits into state coffers and prevent private operators from keeping the gains.

To operate legally, miners had to register in one of two government databases: RISEC (for service providers) or RIM (for miners). They needed to prove they had at least 500 kilowatts of power capacity, submit detailed equipment lists, and pass identity checks. The process took three to four months. And once approved, miners weren’t free to choose their own pools. They were forced into the National Mining Pool (NMP), a government-run system that distributed rewards and tracked every hash rate.

The logic was simple: if the state controls the energy and the infrastructure, it controls the output. Venezuela has some of the cheapest electricity in the world-around $0.03 per kWh-thanks to massive hydroelectric dams. That should have made it a global mining hotspot. But instead of attracting private investment, the government turned it into a bureaucratic nightmare.

The NMP: A Broken System

The National Mining Pool was supposed to be the backbone of Venezuela’s crypto strategy. In theory, it would ensure fair distribution of rewards, prevent fraud, and give the government a direct cut. In practice, it was unreliable.

Miners reported that rewards were delayed or never arrived. Some said they mined for weeks without seeing a single Bitcoin payout. Others described constant connection drops and server crashes. One operator in Maracaibo told analysts his mining rig ran at 20% efficiency because the NMP kept losing sync with his hardware. Independent miners who bypassed the NMP saw 15-20% higher returns-until they got raided.

The government didn’t just control the pool-it controlled access to power. In 2023, during a corruption probe tied to oil and mining officials, over 300 licensed mining centers were shut down overnight. No warning. No appeal. Just power cuts and sealed doors. Many of these facilities had spent months and thousands of dollars getting licensed. Now they were gone.

Energy vs. Control: The Real Conflict

Venezuela’s power grid is crumbling. Even with abundant water resources, the country suffers 40 to 60 hours of blackouts every month. Miners who didn’t have backup generators lost everything. Those who did? They paid 25% more to run diesel-powered systems just to keep their rigs alive.

The government claims crypto mining uses 10% of the nation’s electricity. That sounds high-until you realize most of that power is wasted. Transmission losses, outdated transformers, and illegal connections drain more energy than all the mining rigs combined. Yet instead of fixing the grid, the government blamed miners.

In May 2024, SUNACRIP announced a full ban on crypto mining, citing “excessive energy consumption.” But the real trigger wasn’t electricity use-it was a corruption scandal. The head of the crypto ministry had been arrested. His associates had been siphoning mining profits into offshore accounts. The ban was a distraction, a way to shift blame.

The ban didn’t last. By August 2024, licensed operations quietly resumed. Why? Because the government still needed the dollars. Bitcoin and stablecoins are the only things keeping Venezuela’s economy from total collapse. Over 70% of Venezuelans now use crypto for daily purchases, rent, and sending money to family abroad. The state can’t afford to kill it.

Regulation Without Enforcement

SUNACRIP still exists on paper. Its website still lists rules, forms, and contact details. But since March 2023, the agency has been functionally dead. Its offices are empty. Its staff has vanished. Even the private sector group CAVEMCRIP, created in 2024 to help regulate mining, has no real authority.

This isn’t just incompetence-it’s chaos. Miners don’t know if they’re legal today. A facility that was approved in 2021 might be raided tomorrow. A miner who paid $10,000 for a rig could wake up to find it confiscated because “the system flagged it as unregistered.” There’s no appeals process. No hotline. No transparency.

Baker McKenzie, a global law firm that tracks crypto regulations, calls Venezuela’s system “a legal fiction.” The laws are clear. The enforcement? Nonexistent. The result? A gray zone where only those with connections survive.

The Hidden Economy: Crypto as Survival

Despite the government’s control, Venezuelans are using crypto more than ever. In 2024, blockchain transactions jumped 35% year-over-year. People aren’t mining for profit-they’re using Bitcoin and USDT to buy food, pay doctors, and send money home. The government’s Conexus platform, which handles 40% of electronic transfers, is now building a blockchain network to let banks directly offer crypto services by December 2025.

That’s the real story: Venezuela isn’t trying to ban crypto. It’s trying to control it. The state doesn’t want to stop mining-it wants to own it. It wants to be the middleman between miners and the global market, taking a cut from every transaction.

But the system is too broken to work. The energy is cheap, but the power isn’t reliable. The laws are strict, but no one enforces them. The money is there, but the trust is gone.

What’s Next for Venezuela’s Crypto Mining?

The future of crypto mining in Venezuela depends on one thing: political stability. As long as the government is distracted by international sanctions, corruption probes, and domestic unrest, the system will remain a mess. Analysts don’t expect real reform until there’s a change in leadership.

For now, miners operate in the shadows. Some use offshore servers to bypass the NMP. Others trade mining equipment on black markets. A few lucky ones have found ways to partner with foreign firms that bring in hardware and expertise-but only if they’re willing to share profits.

The government’s dream of a state-run crypto empire has failed. But the people’s need for crypto has only grown. In Venezuela, mining isn’t about getting rich. It’s about staying alive.