Venezuela’s Anti-Corruption Investigation Rocks Cryptocurrency Industry: Exchanges and Mining Farms Shut Down

Venezuelan crypto companies – specifically mining farms and exchanges – have reportedly been ordered to shut down over the past few days, following the President’s order to restructure the country’s crypto regulatory agency. They seem to have been a casualty of an investigation that resulted in the arrest of 21 individuals.

According to the tweets from Venezuela’s National Association of Cryptocurrencies, citing a local media report, mining facilities were shut down in Bolívar, adding that,

“We consider this an arbitrary measure, which goes against the interests of private industry.” 

Bolívar is not the only state impacted, as Lara and Carabobo reportedly saw the same action against the facilities located there. The shutdowns, other reports say, are seen throughout the country. 

Private company Doctorminer‘s CEO Theodoro Toukoumidis and CBO Juan Jose Pinto issued a statement on March 23, saying that there has been a situation affecting the proper delivery of their service to international hosting customers for “an uncertain period of time.” 

It stated that, 

“Following the change of administration at the government crypto regulator, SUNACRIP, due to investigations to possible mishandling of public funds, the national energy supplier (CORPOELEC) is ordering the shutdown of hashrate infrastructures nationwide while investigations are ongoing.”

They added that they couldn’t say how long the “longer than usual power cut” would last. 

There is currently no verified information as to how many mining companies have been shut down. The reports claim that the licensed mining farms have been closed down as well, calling for their reopening and arguing that the measure is costing people their jobs and the country the taxes paid by these employees. 

Exchanges or not exchanges, now is the question

Per several reports, at least some exchanges in Venezuela have been ordered to cease operations. Startup Cryptobuyer tweeted that it had to do so as well, during a “restructuring process” that the crypto regulator is going through, as well as “complying with the orders issued” by the National Superintendence of Cryptoassets and Related Activities (SUNACRIP).

However, just a day later, they tweeted that,

“At no point did SUNACRIP order cessation of operations as has been misrepresented by some media outlets. On the contrary, [it] has given full support for the exchanges to continue their operations.”

With commenters finding these two statements contradictory and confusing, the company directed them to an explanation by the CEO in the Instagram story section (without providing a link). 

Venezuelan lawyer Ana Ojeda Caracas also said that crypto exchanges and mining firms were ordered to cease operations, adding that these measures are “supposedly temporary.” 

SUNACRIP itself has so far not issued a statement to clear up confusion. 

According to Decrypt, the National Association of Cryptocurrencies’ President Jose Angel Alvarez, said that the private companies can’t bear responsibility for what is happening inside the regulatory body and that they are preparing a list of propositions to be delivered soon to SUNACRIP and its new head Anabel Pereira. 

21 arrested

All of the above seems to be a part of the investigation of corruption that includes Venezuela’s oil company PDVSA. 

Tarek William Saab, Venezuela’s Attorney General, alleged that certain government officials were running oil operations with the help of the nation’s crypto department, saying today that,

“10 officials and a group of 11 businessmen were arrested for their alleged participation in a network of corruption in Petróleos de Venezuela (PDVSA).”

These include the vice president of Commerce and Supply of PDVSA and head of the corruption structure, Antonio José Pérez Suárez; as well as the SUNACRIP and crypto-financial operator, Joselit de La Trinidad Ramírez Camacho, said the announcement. “Likewise, Rajiv Alberto Mosqueda and Renny Gerardo Barrientos, both belonging to the Digital Mining and Associated Processes, appear on the list.”

Camacho had led the crypto department since it was established in 2018, overseeing crypto tax rules and the country’s crypto PetroDollar. He is also on the US Most Wanted List since June 2020.

Venezuelan authorities arrested him on March 17. The country’s president Nicolás Maduro announced the reorganization of the SUNACRIP that same day. 

According to Saab, the investigations discovered a network of officials who had used their positions and authority to carry out oil operations parallel to PDVSA through “the assignment to Sunacrip and individuals of crude oil cargoes on ships by the state company without any type of administrative control or guarantees.” The illegally assigned crude oil was marketed, and the corresponding payments to PDVSA were never met.

Saab stated that,

“This network used a conglomerate of commercial companies to legitimize the capital obtained from sales through the acquisition of crypto-assets, personal and real estate.”

And this is not the end of the operation, the announcement suggested. These arrests and the information gained from them are likely to lead to more participants in the scheme. 

You can watch the full announcement below (English auto-translation available). 

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Learn more: 

– Venezuela’s Maduro Purges Crypto Offices of ‘Mafia’ Influences – ‘Hundreds’ Arrested
– Venezuelan Crime Gang Was ‘Stealing Crypto from Retirees’

– Some Crypto Transactions Could Be Hit with 20% Tax in Venezuela as New Law Passes
– Venezuelan Vice Minister Tells Investors to Pay in Crypto to Dodge Sanctions

– What Is Bitcoin Mining?
– How to Mine Bitcoin?