Venezuelan Government Plans to Regulate All Bitcoin Mining
Miners will need to register with the country's cryptocurrency office.
- New rules in Venezuela will legalize cryptocurrency mining but impose heavy restrictions on miners.
- The country will create a registry of miners and a central mining pool to control the industry.
- Venezuela has also cracked down on mining in the past.
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Regulators in Venezuela have introduced a mandate that will regulate all Bitcoin and crypto mining. The new rules have been published in Venezuela’s Official Gazette, file #41,969.
The New Rules
Though the mandate legalizes mining, all residents who want to mine Bitcoin must first obtain a license from SUNACRIP, Venezuela’s National Superintendency of Crypto Assets and Related Activities.
Venezuela will create a Comprehensive Registry of Miners to keep records of this data. Individual miners must describe their activity, their equipment, and other related information. Larger mining farms and ASIC operators will unite all Venezuelan miners, who will be required to obtain special licenses.
Additionally, Venezuela will create a National Digital Mining Pool, which will unite all Venezuelan miners and allow profit-sharing. It appears that this will be mandatory but minimally enforced.
SUNACRIP will offer incentives for those who join the pool and impose penalties on those who do not.
Mining In the Past
This is not the first time that mining-related issues have come up in Venezuela. Reports dating back to 2016 suggest that Venezuelan Bitcoin miners have been fined and arrested for mining crypto; other reports suggest that the government has seized Bitcoin mining equipment from individuals.
These new regulations have raised concerns among the crypto community. Bitcoin mining in Venezuela will be controlled by a central authority, which undermines the Bitcoin community’s desire for decentralization.
Along with centralized power that has been achieved by companies like Bitmain, it is questionable whether mining is truly the best way to achieve decentralization.
However, despite the harsh regulations, it is unlikely that regulators will be able to gain total control over mining. Any mining activity that does not use a large amount of electricity or special equipment (such as CPU mining) is unlikely to be detected.