Venezuela Shuts Down Crypto Mining Operations

Venezuela, a country known for its volatile political climate, has recently made headlines for shutting down several crypto mining facilities throughout the country. According to reports from local media outlets and tweets from Venezuela’s National Association of Cryptocurrencies, mining operations were ceased in the states of Lara, Carabobo, and Bolívar in the past few days. Although it is unclear how many crypto firms were affected by the shutdown, several crypto exchanges were also ordered to cease their operations.

The closure of crypto mining facilities is believed to be part of an ongoing investigation into corruption involving Venezuela’s state-owned oil company, Petróleos de Venezuela S.A. (PDVSA), and the country’s national crypto department. The Venezuelan government has been grappling with the financial crisis and hyperinflation, leading many to turn to cryptocurrencies as a more stable investment option. However, the mining of cryptocurrencies requires a significant amount of energy, which is often subsidized by the government. As a result, the shutdown of crypto mining facilities could be seen as a way to conserve energy and resources amidst Venezuela’s financial struggles.

Additionally, the corruption investigation involving PDVSA and the national crypto department has been ongoing for several years. PDVSA has been accused of embezzlement and money laundering, with the country’s former oil minister, Rafael Ramirez, at the center of the investigation. The national crypto department, which was created in 2018 to oversee the country’s cryptocurrency operations, has also been under scrutiny for alleged corruption and mismanagement of funds.

The shutdown of crypto mining operations in Venezuela has raised concerns among crypto investors and traders, who are now questioning the government’s stance on cryptocurrencies. While some experts believe that the shutdown is simply a way to conserve energy and resources, others believe that it is part of a larger crackdown on cryptocurrencies in the country. The Venezuelan government has been known to take drastic measures to control the country’s economy, including imposing strict capital controls and devaluing the country’s currency.

In conclusion, the shutdown of crypto mining operations in Venezuela is just one of many challenges facing the country’s cryptocurrency industry. The ongoing corruption investigation involving PDVSA and the national crypto department, coupled with the country’s economic struggles, has created an uncertain future for cryptocurrencies in Venezuela. It remains to be seen how the government will navigate these challenges and what impact they will have on the country’s crypto industry.

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Venezuelans reportedly hit by new Bitcoin tax of up to 20%

The Venezuelan government has approved a new tax bill aiming to collect up to 20% in taxes from cryptocurrency transactions, according to local reports.

Venezuela’s National Assembly held the second discussion session on Thursday for a new draft bill targeting taxes on “large financial transactions” in cryptocurrencies like Bitcoin (BTC).

The Venezuelan government reportedly approved the draft bill last Thursday, requiring local firms and individuals to pay up to 20% for operations carried out in cryptocurrencies as well as foreign currencies like the U.S. dollar.

Filed on Jan. 20, the draft law aims to collect from 2% to 20% over transactions in any currencies other than those issued by the Republic Bolivarian Republic of Venezuela, or the Venezuelan bolivar and the country’s oil-backed cryptocurrency, El Petro.

The initiative aims to incentivize the use of the national currency, which reportedly lost over 70% in value last year alone and shed nearly all its value over the past decade.

“It is necessary to guarantee treatment at least equal to, or more favorable, to payments and transactions made in the national currency or in cryptocurrencies or crypto assets issued by the Bolivarian Republic of Venezuela versus payments made in foreign currency,” the bill reads.

Related: India to introduce 30% crypto tax, digital rupee CBDC by 2022–23

As previously reported by Cointelegraph, Bitcoin adoption has been skyrocketing in Venezuela in recent years, with many thousands of local businesses starting moving into cryptocurrency to survive amid hyperinflation. In October 2021, a major international airport in Venezuela was preparing to start accepting cryptocurrencies like BTC as payment for tickets and other services.