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

How Venezuela Took Control of Crypto Mining

In 2018, Venezuela didn’t just allow crypto mining-it tried to own it. While most countries either ignored or banned cryptocurrency mining, Venezuela created one of the most unusual systems in the world: a state-run mining monopoly. The government didn’t just tax it or regulate it. It demanded that every miner, big or small, operate under its direct control. The goal? Use Venezuela’s cheap electricity to mine Bitcoin and other coins-and keep the profits in government hands.

The engine behind this plan was SUNACRIP, the National Superintendence of Cryptocurrencies. Created by presidential decree in 2019, SUNACRIP replaced an earlier agency and became the sole authority over all crypto mining activities. Every miner had to register with them, get a license, and plug into the National Mining Pool (NMP), a government-controlled network that distributed mining rewards and tracked every hash rate. If you mined outside the NMP, you were breaking the law.

The Rules: What Miners Had to Follow

The requirements weren’t simple. To get licensed, miners had to prove they had access to at least 500 kilowatts of electricity-a huge barrier for individuals. They had to submit detailed equipment lists, personal identification, and proof of legal power contracts. The approval process took between three and four months. Most small miners never made it through.

Once approved, miners were locked into RISEC (Comprehensive Registry of Cryptoactive Services) or RIM (Comprehensive Registry of Miners), two government databases that tracked every transaction. They also had to follow Ruling No. 044-2021, which forced them to implement strict anti-money laundering checks, report all transactions, and store user data for audit. For many, this felt less like regulation and more like surveillance.

The government also claimed ownership over the Petro, its own cryptocurrency launched in 2017. Though the Petro never gained real value, it was tied to Venezuela’s oil reserves and used as a tool to bypass U.S. sanctions. Miners were encouraged-but not required-to convert some of their earnings into Petro, which the state could then use to pay public employees or fund projects.

Energy: The Big Promise and the Bigger Problem

Venezuela’s biggest advantage? Electricity. Thanks to state subsidies, miners paid as little as $0.03 per kilowatt-hour-far below the global average of $0.08 to $0.12. That made Venezuela one of the cheapest places on Earth to mine Bitcoin.

But here’s the catch: the power grid was falling apart. In 2023, miners reported 40 to 60 hours of blackouts every month. To keep machines running, many had to buy diesel generators. That added 25% to their operating costs. Some operations shut down entirely.

The government claimed that licensed mining centers used about 10% of the country’s total electricity. That sparked panic. In May 2024, SUNACRIP suddenly banned all mining operations, citing energy overuse. But the ban didn’t last. By August, it was quietly lifted-not because the grid improved, but because the government needed the revenue.

The Collapse of Control

By March 2023, SUNACRIP stopped functioning. Its head was arrested in a corruption probe tied to oil industry contracts. The agency’s offices were shuttered. No new licenses were issued. Existing miners were left in limbo. Some kept mining quietly. Others sold their rigs and left the country.

Even when SUNACRIP was revived in March 2024, it wasn’t the same. The government handed part of the oversight to a private group called CAVEMCRIP. But without trust, enforcement, or clear rules, the system became a mess. One analyst called it “chaotic.” Another said it was “a legal fiction.”

Reports conflicted. Some said over 500 licensed mining centers were still active. Others said only 150 remained, and many were running on borrowed time. The National Mining Pool, meant to be the backbone of the system, was unreliable. Miners reported delayed payouts, system crashes, and lost rewards. Efficiency dropped by 15-20% compared to mining outside the state system.

Why People Still Mine-Despite the Risk

Here’s the irony: most Venezuelans don’t care about the government’s rules. They mine-or use crypto-not because they support the regime, but because they have no choice.

With inflation hitting 200% in 2024, the bolívar is nearly worthless. Seven out of ten people now use stablecoins like USDT or USDC to buy groceries, pay rent, or send money to family abroad. Crypto isn’t a luxury here-it’s survival.

That’s why, even as the state cracked down, blockchain transactions grew by 35% in 2024. The government’s own digital payment platform, Conexus, now handles 40% of electronic transfers. And by December 2025, Venezuelan banks will be allowed to offer Bitcoin and stablecoin services directly to customers-a move that could make Venezuela the first country where crypto is woven into the banking system.

The Real Winners and Losers

Who benefits from this mess? Not the miners. Not the people. Mostly, it’s the government and its allies.

Large mining centers linked to military or state-owned companies got priority access to power and licenses. Independent miners were squeezed out. The $10.75 million in crypto investments Venezuela attracted in 2024 went mostly to startups with political connections, like El Dorado and Yeet. Most small operators never saw a cent.

And yet, the system still pulls in revenue. Mining contributed an estimated 4% to Venezuela’s GDP in 2025-more than oil exports in some months. That’s why the government keeps it alive, even when it doesn’t work.

What’s Next? A System Built on Sand

Venezuela’s state-controlled mining model is a paradox. It’s the only country in the world that tried to turn crypto mining into a state monopoly. But it’s also one of the least functional.

The rules exist on paper. The infrastructure is crumbling. The regulator is broken. And the people? They’re using crypto anyway-through private channels, peer-to-peer apps, and unlicensed miners who work in the shadows.

By the end of 2025, Venezuela might officially allow banks to handle Bitcoin. But without a functioning regulator, without reliable power, and without public trust, it’s hard to see how this system will last. The government didn’t just try to control crypto mining. It tried to control money itself. And in a country where the currency has failed, that’s a battle no one can win.