Venezuela Legalizes Crypto Mining but Will Force Industry Into National Pool

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 licence 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 that 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 US.
• 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.

Also read: Venezuela’s Maduro Mandates Petro Use in Funding of Housing Project