Bitcoin miners caught in an alleged $20 billion corruption scheme in Venezuela
Large-scale bitcoin miners have been forced to shut down their operations in Venezuela as part of the country’s nationwide crackdown on corruption.
It is missing anywhere from $3 billion up to $20 billion from Petróleos de Venezuela, SA, the national oil and gas company. Some of Chavismo’s own key leaders, such as former PDVSA president Tareck Zaidan El Aissami Maddah, are under suspicion during this anti-corruption investigation. The Superintendencia Nacional de Criptoactivos, also known as SUNACRIP, is at the center of this process since it was used to liquidate PDVSA’s sales following the US sanctions against the company and was the primary national institution concerned with everything related to cryptocurrency, including bitcoin mining. .
Other crypto businesses, such as crypto exchanges and payment platforms that were licensed under SUNACRIP’s guidance, have also ceased operations due to “usual context”. Venezuela’s crypto industry, considered one of the world’s most robust crypto ecosystems back in 2017, has crawled to a grinding halt.
It all started when President Nicolás Maduro created the first Venezuelan national cryptocurrency in 2018, the petro token backed by Venezuelan oil and a basket of similar commodities.
Petro and failed attempts at sanctions evasion
The Venezuelan regime created SUNACRIP shortly after issuing the petro with the aim of avoiding US sanctions. But the US issued sanctions against the petro in 2019 as well, so the oil-backed cryptocurrency only works within Venezuela’s borders.
Despite the robust bitcoin mining industry spread throughout Venezuela in recent years, and the popularity of cryptos in the country, even today only Maduro’s supporters and public servants use the petro-cryptocurrency. It has had little or no success, and according to their investigation and Maduro’s speech broadcast via Alberto News, when the petro failed to offer profit or utility, SUNACRIP officials turned to a mafia approach, keeping for them public money that would reach PDVSA’s coffers after they became the unofficial Venezuelan oil dealers to the world.
Venezuelan prisons are now full of men who Joselit Ramirezchairman of the board of SUNACRIP since 2018, and Rajiv Mosqueda, head of digital mining at SUNACRIP, along with other relevant officials from PDVSA and from the crypto watchdog. These arrests are part of what the Chavistas themselves call the “PDVSA cryptoplot,” the anti-corruption investigation. These alleged criminals are accused of being part of former Vice President Tareck El Aissami’s mafia-like corruption group. (Aissami left his position at PDVSA after investigators arrested Ramirez and his associates). SUNACRIP allegedly used cryptos like USDt to complete oil sales worldwide. So far, none of the charged officials have made public statements related to any charges.
The problem is that the oil sales do not match SUNACRIP’s crypto-treasury holdings or the PDVSA balance sheet. Ramírez and his associates have been investigated for their participation in these operations because at least $3 billion worth of assets are missing, potentially much more. But this is not the end. BitcoinBTC miners across the country are still hibernating.
Bitcoin mining in Venezuela
Meanwhile, social media accounts and Telegram group chats across Venezuela have been buzzing since March 2023 about government agents making unusual visits to civilian bitcoin mining facilities.
The national anti-corruption police are trying to find links between the PDVSA crypto plot and local bitcoin miners, while also checking that the government has thorough and up-to-date documentation and licensing arrangements with each Venezuelan bitcoin miner, provided by SUNACRIP. Ramírez and Mosqueda were responsible for granting many of these licenses, so now many people in the bitcoin mining industry are under investigation, to see which miners are actually in compliance with the Maduro administration’s crypto policy and to remove their potential links to the corruption scheme.
There is not much public information about any of these investigations, only widespread rumors of detentions and seizures, but so far there have been no documented arrests of civilian bitcoin miners, and as Teodosio Peraza, head of private bitcoin mining company Criptominero CA, explained to the local newspaper Yaracuy al Día after being visited, all compliance checks are part of normal processes.
On the other hand, at least 500 SUNACRIP workers have been forced out of their jobs during the secret investigations, while the few remaining petro holders are complaining via social platforms like Twitter that the petro is even less useful now, when the whole country is whispering about cryptocurrency and corruption.
It remains to be seen when, or if, Venezuelan crypto companies will return to reliable operations, especially as hundreds of bitcoin miners lose income every day their mining machines remain offline. There is no clarity on what’s next for miners and companies in the once-booming Venezuelan crypto industry. Perhaps the Maduro administration will restructure SUNACRIP, or create an entirely new regulatory body.
Whatever happens, the country’s bitcoin sector is losing out on millions of dollars in bitcoin business opportunities, with Venezuelan miners forced offline until this investigation is resolved.
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