A Venezuelan court has faulted regulators for acting against the law when confiscating over 1,000 Bitcoin miners. Court documents indicate that Sunacrip, the country’s crypto watchdog, and law enforcement officers disregarded the plaintiff’s “right to defense [and] property.”

Emerging details indicate that the BTC miners were in the hands of third parties undergoing maintenance.

In a translated version of the documents, the court said that the third parties had a “contractual relationship” with the equipment owners “to provide a specialized service of operation management, technological management, and maintenance […], and in general of the data processing center.”

Despite taking the devices, the Venezuelan crypto operations regulator failed to disclose where they’ll store them.

The court also observed that the regulator failed to allow up to 15 days to be presented with documents to show whether or not they were operating against the law.

Apart from seizing the machines on the same day, the watchdogs didn’t allow those present at the facility “to go out and look for documentation.”

Holders of Bitcoin Mining Rigs Didn’t Have the Required Permits

In July, personnel from the country’s defense ministry seized hundreds of BTC mining equipment manufactured by a leading Bitcoin miner manufacturer, Bitmain. At the time, the authorities claimed that its holders didn’t have the necessary papers allowing them to hold and operate the machines.

In a tweet announcing the confiscation, commander Adolfo Rodriguez said that “315 Bitcoin machines that were being transported in a 350 truck were retained, for not having the permit issued by the National Superintendency of Cryptoactives (Sunacrip).”

Such seizures are not unique to Venezuela. In July, Malaysia destroyed BTC mining rigs confiscated in two months ending April. According to reports, the equipment was worth over 1.2 million USD at the time of the seizure.

Six people were also arrested. Malaysian authorities said that the Bitcoin miners were illegally connected to the country’s power grid, causing the power company losses worth millions of US dollars.

Additionally, authorities claimed that the illegal connections caused power outages, and “three houses were razed.”

A Spike in Electricity Led Authorities to 1,000 Bitcoin Mining Rigs

Mid-this year, Iran also seized 1,000 BTC mining rigs. Iranian authorities noticed a spike in electricity consumption leading to an investigation. “Demand for power rose by 7% in June, and cryptocurrency mining was thought to be the main cause,” an energy ministry spokesperson said at the time.

As the Venezuelan court overturns the confiscation of Bitcoin mining machines, Kazakhstan has clarified its position on providing lawful cryptocurrency miners with power. According to Magzum Mirzagaliyev, Kazakhstan’s Minister for Energy, the country will not restrict registered cryptocurrency miners from accessing electricity.

He said this while meeting with the Kazakhstan Association of Blockchain Technologies, the Association of the Blockchain and Data Center and Technology Industry, among industry participants.

However, lawful crypto miners will have to “carry out their activities without prejudice to the country’s energy security” to avoid power disconnections. Mirzagaliyev stressed that all the players in the blockchain space need to work together to realize the industry’s “high potential.”

Gray Miners Hide Where “Electricity Consumption is Unpredictable”

In a press release by the energy ministry, associations focusing on decentralized technology agreed to invest in the country’s plans to expand power production, including those involving renewable energy sources.

The associations’ heads disclosed “that they are ready to consider [purchasing both] domestic [and] imported electricity.” The meeting participants also agreed on the need to eradicate illegal crypto miners or “gray” miners.

According to them, a gray miner is anyone hiding the power consumption of their crypto mining activities.

Alan Dordzhiev, the chairman of the Blockchain and Data Center and Technology Industry, noted that unlawful miners hide in places “where the growth in electricity consumption is unpredictable, for example, in settlements in the southern regions of Kazakhstan.”

Yesterday, a Kazakhstan crypto mining hosting company, Enegix, hinted at plans to build their own hydropower plant. While speaking at a crypto mining event in Dubai, its executives said that it intends to start building the power plants between January and March next year.

To start with, the crypto mining hosting company hinted at starting with small generators with a maximum capacity of three megawatts. Enegix explained that the model is expandable. It also revealed that it has already carried out preliminary surveys on Kazakhstan’s rivers.