Home Digital Asset Argentina’s tax watchdog busts illegal digital asset mining operations

Argentina’s tax watchdog busts illegal digital asset mining operations

by Lottar

Argentina’s Federal Administration of Public Revenue (AFIP) has been on a raid in recent weeks, with illegal virtual currency miners being the main targets. The tax watchdog said since the crackdown began, three illegal mining operations had been discovered in different provinces.

The AFIP revealed details of the operations, saying the first raid took place last Tuesday in San Juan, where it uncovered the illegal operation in the property initially used for processing agricultural products. The report failed to disclose the number of mining equipment seized nor the values ​​of the digital assets seized.

Riding the wave of a successful bust, agents of the tax administrator carried out another raid in Buenos Aires, the country’s capital, where 1,355 video cards and 142 mining rigs were seized. The mining farm operated out of a commercial building that residents found incredulous that it was used for mining virtual currencies.

The state-run agency also confirmed that a third raid had been carried out in Cordoba, but details were not disclosed. AFIP stated that the attacks were not carried out arbitrarily, but were the product of thorough investigations into the energy consumption figures of the buildings.

“It was possible to determine the existence of the exploitation within a company linked to another firm, which declares to carry out activities different from those found during the inspection, but which as a screen served to justify the consumption of electrical energy, and thus the economic reality of the place,” the report states.

Only a handful of mining companies have been granted the license to operate in Argentina, but no official registry is available to track their operations. Attracted by cheap electricity, several mining farms have sprung up across the country, clustered mainly in residential areas to take advantage of subsidized rates.

The miner capitulation

Argentina’s crackdown on the activities of illegal miners is indicative of the increasing persecution these entities face. Rising energy costs caused by the war in Eastern Europe forced city administrators to crack down on illegal mining activities in their jurisdiction.

Kazakhstan, Iran and Russia, countries that have hosted fleeing Chinese miners, have seen their energy supplies buckle under the weight of increased mining activity. Falling asset prices and the criminalization of mining activities led to a miner capitulation, causing miners to sell their digital currencies at the fastest pace since 2018.

In Texas, energy shortages have brought mining operations to a halt while some firms have been forced to cease operations in exchange for electricity credits. The state’s grid operator revealed that the recent shortages would be temporary, but with grim macroeconomic conditions, miners may have to brace themselves for a long ride.

See: BSV Blockchain Convention panel, Blockchain Mining & Energy Innovation

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