Venezuela, the country which has been struggling financially because of hyperinflation, has had quite a love-hate relationship with Bitcoin.
The government wants to push native digital currency Petro for citizens to use. However, the poor design and technical limitations of the Petro make it hard to use. A majority of the population prefers bitcoin as a bridge currency to help them store value as the value of the national fiat keeps receding.
In a recent development coming from the country, the National Guard, the country's military has seized over 300 ASIC bitcoin miners from local miners for the lack of necessary paperwork and documentation for possessing that equipment.
Bitcoin mining in the country is not illegal, and electricity is also quite cheap; however, due to the government's passiveness towards crypto, local bitcoin miners often have a run-in with law enforcement agencies.
The National Guard shared the news on Twitter and noted:
“In the PAC “Toll Guayana” of @GNB_BolivarD625, 315 Bitcoin machines that were transported in a 350 truck were retained, for not having the permission issued by the National Superintendency of Cryptoactive. #6Jul#FANB GNBCCuidandoDelPueblo.“
En el PAC “Peaje Guayana” del @GNB_BolivarD625, se retuvieron 315 máquinas Bitcoin que eran transportadas en un camión 350, por no poseer la permisología emitida por la Superintendencia Nacional de Criptoactivos. #6Jul #FANB GNBCuidandoDelPueblo #CuarentenaRadicalPreventiva pic.twitter.com/d9dJGgThLw
— GNB BOLÍVAR 😷👍 (@GNB_CZBolivar) July 6, 2020
The National guard claimed that they were undergoing a routine check when they found a truck trying to pass through the Guayana's Toll Military checkpoint containing 315 of Bitmain's Antminer S9 Bitcoin mining machines.
When the driver was asked to produce the documents for those mining machines failed to produce the same. The military then seized the machines and alerted the National Superintendence of Cryptoassets and Related Activities (Sunacrip), the authority responsible for regulating cryptocurrencies.
The Bitcoin Mining Industry is Underdeveloped in Venezuela
Venezuela is one of the most oil and mineral-rich countries with abundant crude oil and diamond mines present in the country. The country is also among the places with the lowest electricity rates, which make it a perfect hub for bitcoin mining; however, due to the ongoing financial crisis and the corrupt government, the industry is quite underdeveloped.
Venezuelans have found Bitcoin mining to be a profitable way to earn Bitcoin and trade US Dollars against it, as the national fiat is not worth even the paper it is printed on. Bitcoin mining is legal in the country and requires those who want to operate bitcoin mining farms to register with the authorities.
However, the entrepreneurs and firms interested in the field avoid doing so to avoid coming under the radar of criminals and even corrupt government officials. One such Bitcoin miner in the country expressed his ordeal last year saying:
“I think I'm ‘marked' by both the police and the community.”
Despite the fear of authorities and criminals, local Venezuelans are increasingly getting involved with bitcoin mining because the reward for mining outweighs the external threats.