Venezuelan authorities destroyed a bitcoin mining center in Valencia in Carabobo state, the most recent action taken in an effort to clamp down on bitcoin-related activity in the economically ravaged country, according to criptonoticias, a Venezuelan cryptocurrency website.

Venezuelan authorities arrested members of a Poland-based network after locating a shed with 11,000 bitcoins in Los Guayos in an industrial zone, according to the Bolivarian government of Venezuela website. The Bolivarian National Police (PNB) division against capital legitimation detected suspicious shipments entering a warehouse that contained bitcoin mining equipment. The investigation was conducted by a PNB commission in the state of Carabobo.

A Criminal Network

The network used the bitcoin equipment in various parts of the country to legitimize capital, conduct computer crime, finance terrorism, engage in electronic theft and engage in fraud exchange.

Authorities arrested Eusebio Gómez Henríquez (51) and Andrés Alejandro Carrero Martínez (35).

The operations were camouflaged as Internet connection centers and a data center.

Government action in various parts of the country continues against “criptomonedas” operations.

Pictures on the criptonoticias website show PicoStocks 100TH, a machine developed by PicoStocks and programmed by the Institute BioInoBank group of scientific and technological advisors. Both organizations are based in Poland.

Equipment Taken To Venezuela

More than 14,000 of the bitcoin machines were available for sale in August 2015, of which 11,000 were acquired by Andres Carrero and transported allegedly to Venezuela, according to criptonoticias.

Authorities also recently dismantled another mining establishment of on the outskirts of Caracas, where they arrested four people, according to criptonoticia. The Corps of Scientific, Criminal and Criminal Investigations carried out the operation, claiming those involved washed money and stole the electricity to carry out the mining.

In late January, three men and a woman were arrested in the town of Charallave in the northern region of the country.

The arrests first came to light via an Instagram feed of Douglas Rico, director of the Cuerpo de Investigaciones Científicas Penales y Criminalisticas (CICPC), the federal police agency. The director’s social media post identified the apprehended as Néstor Rafael Amundaray Precilla (57), Ana Cecilia Farías Villanueva (25), Kevin David Ojeda Díaz (26) and Alberto José Zapata Orta (23), later confirmed by an official CICPC release.

Rico stated that the accused were operating “more than 300 [bitcoin] miners” from mining equipment manufacturer Bitmain before selling them in Cúcuta, a Colombian town near the Venezuelan border. Venezuelans’ activity in this Colombian border town has proven controversial for authorities as citizens engage in swapping bolivars to dollars, circumventing Venezuela’s currency controls. Essential commodities like food and gasoline are also smuggled into Venezuela through the border town.

Rico stated that the “consumption and stability of the electric service” in the place was affected due to the bitcoin miners. Despite the accusation, there are no further details about how bitcoin mining pertains to “internet fraud.” Similarly, there are no additional details of power consumption by the four who stand accused of electricity theft.

Also read: Destinia exclusively accepts bitcoin payments in Venezuela amid financial chaos

Why Venezuela Turns To Bitcoin

As the country reels from hyperinflation and an impoverished economy, many have turned to bitcoin as an alternative currency. Bitcoin miners have thrived, with fortunate miners and adopters using the cryptocurrency to import food and groceries from the United States.

Venezuelan authorities have taken a hard line stance against bitcoin ever since hyperinflation struck in late 2014. A gray market for bitcoin has been in function ever since. In early January, the Venezuelan government, through a state-owned Internet service provider – the largest in the country – blocked access to bitcoin websites outright.

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