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James Carter

March 27, 2023

Anti-Corruption Investigation Rocks Crypto Industry in Venezuela

Reports say that Venezuelan crypto companies have been told to close down over the past few days. This comes after the President told the country’s crypto regulatory agency to be reorganized.

Anti-Corruption Investigation Rocks Crypto Industry in Venezuela

The investigation that led to the arrest of 21 people seems to have hurt exchanges and mining companies.

According to tweets from Venezuela’s National Association of Cryptocurrencies, mining facilities were shut down in Bolvar, which “goes against the interests of private industry.”

Bolvar is not the only state that has been affected. The same thing is said to have happened to facilities in Lara and Carabobo.

Other news sources say that the shutdowns are happening all over the country.

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CEO Theodoro Toukoumidis and CBO Juan Jose Pinto of the private company Doctorminer put out a statement on March 23 saying that there has been a problem with the way their service has been delivered to international hosting customers for “an unknown amount of time.”

In it, it said,

“After the new government crypto regulator, SUNACRIP, took over, there were investigations into whether public funds were mishandled. As a result, the national energy supplier, CORPOELEC, has ordered the shutdown of hashrate infrastructures across the country while the investigations are going on.”

They also said that they didn’t know how long the “longer than usual power outage” would last.

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At the moment, there is no reliable information about how many mining companies have closed. The reports say that the licensed mining farms have also been shut down. They argue that this is costing people their jobs and the country the taxes that these workers would have paid.

Exchanges or not exchanges, now is the question

Several news sources say that at least some exchanges in Venezuela have been told to stop doing business.

The startup Cryptobuyer said on Twitter that it had to do the same thing because the crypto regulator is in the middle of a “restructuring process,” and it had to “follow the orders issued” by the National Superintendence of Cryptoassets and Related Activities (SUNACRIP).

But just one day later, they posted on Twitter that,

“Some news outlets have given the wrong impression that SUNACRIP ever told people to stop working. This is not true. On the contrary, it has done everything it can to help the exchanges keep running.”

Commenters found these two statements to be contradictory and confusing, so the company told them to look in the Instagram story for an explanation from the CEO (without providing a link).

Ana Ojeda Caracas, a lawyer from Venezuela, said that cryptocurrency exchanges and mining companies were told to stop doing business. She added that these measures are “supposed to be temporary.”

So far, SUNACRIP has not put out a statement to clear things up.

According to Decrypt, the President of the National Association of Cryptocurrencies, Jose Angel Alvarez, said that private companies can’t be held responsible for what happens inside the regulatory body and that they are putting together a list of suggestions to give to SUNACRIP and its new head, Anabel Pereira.

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21 arrested

All of these things seem to be part of the investigation into corruption involving the oil company PDVSA in Venezuela.

The Attorney General of Venezuela, Tarek William Saab, said today that some government officials were running oil operations with help from the country’s crypto department.

“Eleven businessmen and 10 officials at Petróleos de Venezuela (PDVSA) were arrested for allegedly being part of a network of corruption.”

Antonio José Pérez Suárez, vice president of PDVSA’s Commerce and Supply and head of the corruption system, and Joselit de La Trinidad Ramrez Camacho, SUNACRIP operator, and crypto-financial operator, are among these people, according to the announcement. “Rajiv Alberto Mosqueda and Renny Gerardo Barrientos are also on the list. They are both from the Digital Mining and Associated Processes.”

Camacho has been in charge of the crypto department since it was set up in 2018. He was in charge of crypto tax rules and the PetroDollar, the country’s cryptocurrency. Since June 2020, he has also been on the US Most Wanted List.

On March 17, the government of Venezuela arrested him. On the same day, the country’s President, Nicolás Maduro, said that the SUNACRIP would be changed.

Saab says that the investigations found a network of officials who had used their positions and power to run oil operations in parallel to PDVSA. They did this by “assigning crude oil cargoes on ships to Sunacrip and individuals without any kind of administrative control or guarantees” from the state company. The illegally given crude oil was sold, but PDVSA never got the money it was supposed to get.

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Saab told us that,

“This network used a group of commercial companies to make the money they made from sales of crypto-assets, personal property, and real estate seem more legitimate.”

And the message said that this was not the end of the operation. Because of these arrests and what was learned from them, it is likely that more people will join the scheme.

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