Venezuelan Bitcoin Miners Bribed and Thrown in Jail by Secret Police.
Over the past few months, officials in Venezuela have been cracking down on underground Bitcoin mining operations within the country. According to various reports, Venezuela’s secret police has been coercing Bitcoin miners for bribes or they would otherwise be thrown into jail if they don’t pay the extortion.
The Venezuelan economy has been suffering from significant hyperinflation and hardship for quite some time. Over the course of the past year, Bitcoin adoption has grown rapidly in Venezuela as some citizens are turning to the decentralized currency and underground mining operations. Electricity is cheap in Venezuela and subsidized by the state, making mining operations more lucrative than working for bolivars.
Last November, two brothers from Caracas operating a Bitcoin mining operation were raided by the country’s secret police (Sebin). According to the brothers’ reports, officers ordered them to pay $1,000 for every mining machine they owned. The brothers, who wished to remain anonymous, stated that they had paid the police to keep mining. Nevertheless, miners in Venezuela are being caught more often because the state’s power corporation is finding mining operations consuming 20 times the electricity used in a traditional home.
It has been reported through various news portals on multiple incidents of mining operations being seized by Venezuelan authorities. However, these types of arrests started in March of 2016 as Joel Padrón and José Perales from Valencia were arrested for possession of illegal mining rigs and electricity theft. The miners ran their business stealing electricity within the industrial zone of Valencia, officials from Sebin explained.
Sebin also stated that they had seized multiple mining rigs and four laptops from the establishment where Padrón and Perales were arrested. At the time, Daniel Arraez, a consultant for the Venezuelan Bitcoin exchange Surbitcoin, was asked to give a testimony. The accused miners had stated that they had used Surbitcoin’s services to conduct trades.
When Arraez went to the police station, he was suddenly detained and thrown in a cell with Padrón and Perales. Arraez details how he was charged with associating with a criminal operation and illegal money transmission. The Surbitcoin consultant said that he spent eight months in prison and is currently preparing for a trial.
“We were only the scapegoats of the disastrous situation in the country’s electricity sector”, Arraez explains.
Surbitcoin has also had some issues with regional banks this year but is operating once again after a temporary hiatus. However, the company says that its user base has grown from 450 registrants to 85,000 to date.
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