Venezuela arrests 21 people in crypto-related oil corruption scheme

Venezuelan prosecutors arrested 21 people for involvement in a wide-ranging crypto-related corruption scheme at state oil company Petroles de Venezuela SA (PDVSA) on March 24, as Reuters reported.

Eleven of the people arrested were businessmen, while the remaining ten were government officials, according to the Reuters article. In addition, the Venezuelan government has issued arrest warrants for 11 more people allegedly participating in the same scheme.

What happened?

The arrest warrants were released as a result of an investigation started in October 2022, which focused on PDVSA, the judiciary and the country’s crypto watchdog, Sunacrip.

State Attorney Tarek Saab stated about the arrests at a press conference:

“We are talking about one of the most sinister plots in recent years, involving officials, businessmen who profited from corruption and young people – including the so-called mafia women – who participated in corruption and money laundering,”

Saab did not disclose company names or details of the exact scope of the scheme. However, he stated that Sunacrip was allocated oil cargoes for sale without administrative control, allowing recipients to purchase these cargoes without making a recorded payment.

The US government discovered that Venezuelan oil shipments were being paid for via cryptocurrencies, leading the US to impose sanctions on Venezuela in 2019. In February 2023, local news outlets reported that two oil brokers were accused of settling illegal oil deals with PDVSA using Tether (USDT ) to avoid sanctions and settlement payments.

Previous arrests

Reuters also noted that Saab’s office has investigated over 30 cases related to the country’s oil corruption, leading to the prosecution of nearly 200 people. A handful of government officials and businessmen were also arrested or removed from their posts in the past week.

On March 20, Venezuelan anti-corruption lawyers sent a letter to the Attorney General. They called for PDVSA officials to be investigated, prompting the company’s president to resign the same day. Two days later, the Venezuelan president named PDVSA’s new chairman, Pedro Tellechea, as the country’s new oil minister.

Sunacrip, the National Superintendency of Crypto Assets and Related Activities, is the country’s designated official body for regulating crypto assets. On March 18, the local news sources reported that Sunacrip’s head Joselit Ramirez, along with several other government officials, were arrested for being involved in corruption schemes.