A severe shortage of funds has arisen for mining companies due to the continuing investigation into a corruption scandal and the suspension of cryptocurrency mining in Venezuela.
The Venezuelan government suspended cryptocurrency mining in April as it launched an investigation into a major corruption case in which cryptocurrencies were reportedly used to avoid payments owed to state oil company Petroleos de Venezuela.
The investigation has been ongoing for three months, but there is still no date set for when the state will lift the ban on cryptocurrency mining.
Venezuelan news sources, citing national mining companies, reported that more than 75,000 pieces of equipment are now out of service. This number is equal to the amount used by Riot Platforms, one of the largest mining companies in the world.
Law enforcement agencies in Venezuela have launched a check on the mining companies to see if the funds used to purchase the equipment are linked to any criminal activity with corruption in the oil industry.
Alexis Lugo, leader of the Criptoneros project, expressed regret at this state of affairs:
"It is a terrible shame that after overcoming so many obstacles with formalisation and regulations, we now find ourselves in such a deplorable situation.
The current situation has caused significant damage to Venezuelan mining companies, as they are experiencing a shortage of funds and have therefore been forced to close their companies and begin bankruptcy proceedings.
At the same time, it exacerbated the mistrust of the Venezuelan authorities towards the cryptocurrency market, as the country's largest bank, Banco de Venezuela, was attacked by a virus that demanded a ransom in digital currency to unlock and restore data.