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.
Sep 23, 2020 at 1:30 p.m. UTCUpdated Aug 19, 2021 at 4:30 a.m. UTC
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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.
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