Digital mining is the process whereby computing capacity is provided to a blockchain network to collaborate in recording of transactions and in the security of the same.2 The process provides security to the network and allows the generation of new cryptocurrencies.
The Guidelines regulate the activities related to the use, import, and commercialization of digital mining; equipment, parts and pieces; adaptation of spaces to offer the hosting service for digital mining, including the manufacture, assembly, repair and improvement of such equipment, and providing digital mining service in the cloud.
Individual or legal entities, public or private, communal councils, communes and other forms of popular power organization domiciled in Venezuela that carry out activities inherent to digital mining and associated processes within the framework of the Comprehensive Cryptoactivities and Related Activities System are subject to the Guidelines.
a. Conditioned: Document that develops particular and technical aspects of this provision for its full execution.
b. Digital Farms: Information centers, technically equipped to mine cryptoassets.
c. Hash: A cryptographic hash function - usually known as a "hash" - is a mathematical algorithm that transforms any arbitrary block of data into a new character string with a length.
d. Hosting: Service that offers digital mining positions to locate the equipment in a safe and ventilated environment, with electricity supply, high-speed Internet connection and remote access for its management.
e. Digital Mining: Activity through which new cryptoassets are issued and transactions are confirmed in a blockchain network. Process of solving the hash puzzle, within which the consensus operations take place.
f. Digital mining in the cloud: It is a service offered through which the user can obtain cryptoassets by renting mining power.
g. Digital cloud: Physical infrastructure capable of storing and processing data in order to offer this computing service through a network, which is usually the Internet.
h. National digital mining pool: Pooled miners who agree to share block profits in proportion to the contributed mining hash power. They share a similar operation to cooperatives and the same would be in charge of SUNACRIP.
i. Comprehensive Registry of Cryptoactive Services ("RISEC"): Web system maintained by SUNACRIP in which the user who carries out activities within the scope of the Guidelines registers.
j. Comprehensive Registry of Miners ("RIM"): It is a Web application available to users interested in processing and managing the operating licenses framed in the activities related to the object of the Guidelines.
4. Licenses and permits.
4.1. Operating Licenses. The Guidelines established that SUNACRIP will grant licenses to users who intend to use, import, commercialize digital mining equipment and its parts and pieces; equip and condition spaces to offer the Hosting service to digital mining equipment; manufacture, assemble, repair and improve such equipment, and provide the cloud mining service.
For obtaining the license, users must be registered, validated and updated in RISEC and comply with the requirements and provisions established by SUNACRIP through RIM.
SUNACRIP will incorporate the attributes to the licenses granted, with attention to the aptitude and capacities demonstrated by the requesting users and the real needs of the market, considering the norms issued to that effect and under article 23 of the Constituent Decree on the Comprehensive Cryptoactive System.3
4.2. Quality certificate. SUNACRIP will grant a quality certificate in recognition of users who manufacture or assemble digital mining equipment in Venezuela, for meeting high quality standards and processes required.
To grant the certificate, users must be registered, validated and updated in RISEC and comply with the requirements and provisions established by SUNACRIP for these purposes.
4.3. Administrative Procedure. SUNACRIP' Intendancy of digital mining and Associated Processes will carry out the administrative procedure for receiving and validating the information provided by applicants, to obtain the licenses and certificates. It will also coordinate and evaluate the execution of the plans, projects and programs of the city hall and will have the broadest powers within the scope of its powers established by the National Superintendent of SUNACRIP.
4.4. RIM. The Guidelines created the RIM as a Web application run by the Administration responsible for SUNACRIP, provided to users who have an interest in processing and managing any operating license framed in the activities related to the purpose of the Providence.
The RIM will allow the user to select the license it wants to obtain and generate the application. The user will need to provide the data and attachments required by the platform, pay online and have a history of its requests, and download the license online once approved.
At the user's request, SUNACRIP will analyze and evaluate the data and annexes provided through the RIM. If applicable, SUNACRIP will grant the license in the following 20 business days, extendable for 20 more days. The licenses issued only attribute the power to the requesting user and are not transferable.
4.5. Renewal. SUNACRIP will renew the licenses, certificates and other associated processes, to those natural and legal persons that request so and comply with updating the requirements and procedures established in the Guidelines.
Users must request the renewal of licenses, certificates or associated processes 30 business days before their expiration.
4.6. Denial of the license application. If SUNACRIP denies the license application, it must notify the user with a motivated act, within 20 business days following the application.
The user may file, within 10 business days following notification of the refusal, and administrative appeal for reconsideration before the National Superintendent of SUNACRIP, who must decide, by reasoned act, within 15 business days, confirming or revoking the denial and ordering the issuance of the license, if it is the case. The administrative appeal ends the administrative procedure.
The user may file a judicial appeal before the contentious-administrative courts to challenge the National Superintendent's decision, as of receiving service thereof or from the date on which the administrative silence operates.
4.7. Suspension of the license. If the user breaches the obligations established in the Guidelines, misuses the license or there are well-founded indications it provided false or erroneous information or documentation, SUNACRIP may preventively suspend the RIM and RISEC registrations and will start the administrative procedure, without prejudice to the civil, criminal and administrative responsibilities that may arise.
4.8. Revocation of the license or certificate. SUNACRIP may revoke the use of the license or cancel the certificate when there is sufficient evidence to do so, after giving the user the opportunity to provide arguments and evidence in rebuttal.
4.9. Public price. SUNACRIP will publish the public prices that will govern each type of license, process or certificate on its Website.
5. Conservation of documents.
The subjects of application of the Ruling must save and conserve for 10 years, the documentation and records, whether physical, electronic or digital, linked to digital mining activities. SUNACRIP, the Intendancy of Digital Mining and Associated Processes or any other municipality, may request from public or private organizations and entities the information it deems pertinent to exercise its powers.
6. Conditioned.
SUNACRIP will regulate through the Conditions the specialized technical aspects that develop the content of the Guidelines.
7. National Digital Mining Pool.
7.1. The National Digital Mining Pool aims to group the digital miners in Venezuela and encourage the international digital mining community to be part of the pool to accumulate high processing power that speeds up the resolution of blocks.
7.2. The National Digital Mining Pool will allow the user to register from its URL on the Internet, creating an account that gives them access to its services; so the pool can identify the connections that come from the Internet to its server, opening a communication channel between the miners and the mining server.
7.3. The Pool must:
a. Receive transactions from the network.
b. Communicate the information to the miners.
c. Control and monitor the work.
d. Send the blocks solved correctly to the network.
e. Carry out the accounting of resolved blocks and the work contributed by the miners.
f. Send the corresponding profit to the miners in the pool.
7.4. SUNACRIP may grant benefits, incentives and propose tax benefits to stimulate digital miners to join the Pool.
7.5. The user who dedicates himself to digital mining not connected to the National Digital Mining Pool will be subject to the measures, infractions and sanctions provided in the Constituent Decree on the Comprehensive Cryptoactive System.
8. About Digital Mining farms.
SUNACRIP will stimulate and encourage the creation of digital mining farms in Venezuela, under the technical and professional supervision of its staff.
9. Manufacturing and Assembly Project.
Users who implements the development of technology through the manufacture and assembly of digital mining equipment and related components, to promote the creation of mining centers, will have the technical and professional support of SUNACRIP and can enjoy the benefits and exemptions granted by the National Executive for this purpose. For this, you can carry out your production processes in the exclusive Petro areas or in any part of the national territory.
10. Performance of projects.
SUNACRIP may carry out periodic evaluations in the different projects related to digital mining, to measure their performance and provide incentives.
1 Administrative Guidelines No. 84-2020 (Official Gazette No. 41,969 of 21 September 2020). SUNACRIP issued the Guidelines based on articles 20(10) and (12), and 29 of the Constituent Decree about the Integral System of Crypto-assets (Official Gazette No. 41,575 of 30 January 2019).
2 https://sunacrip.gob.ve/mineria.html#:~:text=Se%20conoce%20como%20miner%C3%ADa%20digital,la%20seguridad%20de%20 la%20misma, consulted on 25 September 2020.
3 (Official Gazette No. 41,575 of January 30, 2019).
