The local legal association Criptojuris Venezuela has recently published a bulletin on its official blog that addresses the legal risks of mining crypto currencies in Venezuela.

The bulletin number 004-2020 called „Digital Mining-Special Bulletin“, is a brief tour of the „legal audit from the point of view of the digital mining activity in Venezuela“.

The text seeks to provide answers and legal advice to small, medium and large users who engage in this activity, „to determine whether the activity they carry out complies with the requirements established in the Venezuelan regulations,“ the bulletin states.

Chronology of Crypt-Currencies in Venezuela: From Bitcoin to Petro

The objective, as can be seen in the text, is to mitigate the legal risks associated with such activity in the Latin American country, which clearly expresses the possibility of economic losses or even personal freedom due to non-compliance with the rule.

In Venezuela, in the recent past, users dedicated to this activity have been victims on numerous occasions of harassment, persecution, and even dismantling of farms by state agencies, under the premise of serious legal faults in the execution of their activities.

The document clearly expresses three fundamental norms under which users must be aware of complying fully with them in order to avoid being sanctioned by the Venezuelan authorities in the execution of their mining activities.

Bitcoin miners will use the derivatives, just as traditional commodity producers do

The standards in question are in accordance with the electricity sector: Organic Law on the Electricity System and Service, Regulations for the Electricity Service and Quality Standards for the Electricity Distribution Service.

According to the legal association, these regulations stand out because one of the fundamental elements of cryptomining activities is associated with the consumption of electrical energy and in the past, this has been used as a weapon to imprison users dedicated to the activity in a clandestine manner.

In this regard, the document states that „the allegations by police and administrative authorities about the crime of theft of electrical energy or that the miners disturb the national electrical system are totally false“.

Crypto-Legal Audit

To avoid these inconveniences, they recommend carrying out the respective cryptolegal audit of compliance with electrical regulations, as well as „the technical audit of compliance with parameters required in the electrical regulations themselves“.

Mining a Bitcoin consumes more energy than a residence in two months, says PwC report

For Criptojuris, the respective audit must be oriented to the compliance initiated by the Petro Zones, in order to „determine and guide“ if the activity is within the legal parameters of the national electric system, but also at a tax level and as far as equipment import permits are concerned.

The above is framed within the Constituent Decree on the Integral Ethereum Code System, which regulates all the mining activity in the country and certifies the users so that they can execute all the activities inherent to crypto-currency mining through the Integral Registry of Cryptoactive Services „RISEC“.

Finally, the bulletin makes a brief review of the norms framed in the fight against the illicit of digital money. The first to which it refers is the Organic Law against Organised Crime and Financing of Terrorism, and on the other hand Resolution 083-18 of SUDEBAN, the body responsible for regulating the national banking system.

In this regard, the recommendation of the legal body is that users should inform their banking institutions of the authorised activities they are carrying out, in order to avoid falling into legal sanctions through the use of traditional financial instruments for the exchange of digital assets resulting from cryptomining

Written by