The Venezuelan government has suspended the operations of crypto exchanges and mining activities due to a multi-billion dollar corruption investigation.
Venezuelan officials have asked Bitcoin miners to temporarily shut down operations while they investigate a big corruption scandal that may have syphoned off between $3 billion and $20 billion from Petróleos de Venezuela, the country’s state-owned oil and gas corporation.
Corruption investigation further shakes up crypto in Venezuela
According to Forbes, a shocking corruption case in Venezuela has forced large-scale Bitcoin (BTC) miners to shut down their operations. Investigators have accused some of the leaders of President Maduro’s political movement, known as Chavismo, of being involved in the scheme.
The Superintendencia Nacional de Criptoactivos (SUNACRIP), which was involved in liquidating sales after US sanctions against the corporation, is at the centre of the process. It was also among the main institutions concerned with all types of energy usage and bitcoin mining.
Other cryptocurrency businesses, including exchanges and payment platforms with SUNACRIP licences, have also been ordered to suspend operations by the authorities throughout the inquiry. Law enforcement agents have started inspecting domestic bitcoin mining firms to find any links between them and the corruption leaks in the energy sector.
They have also checked whether miners have the necessary authorisation and up-to-date documentation to operate in the country.
The investigation’s length is unknown, and the resumption of operations for Venezuelan crypto entities is uncertain. Some speculate that President Maduro would reorganise SUNACRIP or create a whole new regulatory body.
It is worth noting that this recent development is related to a previous incident where the Venezuelan government had ordered the closure of several cryptocurrency mining operations across the nation, due to the ongoing corruption investigation. This move had sparked concerns among crypto investors and traders, who were uncertain about the government’s stance towards cryptocurrencies. While some analysts believed that the shutdown was an energy-saving measure, others interpreted it as a part of a wider crackdown on cryptocurrencies in Venezuela.
Several experts have challenged the notion that crypto mining’s energy demands are exorbitant, arguing that they are often exaggerated and misrepresented in comparison to other energy-consuming activities. Joshua Ellul, an expert in Blockchain, Distributed Ledger Technologies (DLTs), smart contracts, and the intersections between technology regulation and law, has notably stated in an interview with AIBC News:
Whilst mining is often reported as the innovation that will be the end of the world – due to its allegedly over-the-top energy requirements, the argument needs to be put into perspective. When compared to Youtube, Netflix and Gaming, bitcoin appears to be the most sustainable source of energy consumption.
“The point is that the question we should be asking is, in fact: Is the utility worth the energy overhead? We should ask this for every technology.”
DoJ accusations of crypto cover-up of illegal activities
The US Department of Justice has accused high-ranking Venezuelan officials, including President Maduro, of being leaders of the notorious “Cartel of the Suns,” which employed digital assets to cover transactions for massive quantities of illegal imports into the USA.
The agency suggested cryptocurrencies could have played a role in other illegal activities in Venezuela in recent years. Attorney General William Barr shed more light on the charges:
For more than 20 years, Maduro and a number of high-ranking colleagues allegedly conspired with the FARC, causing tons of cocaine to enter and devastate American communities.
“Today’s announcement is focused on rooting out the extensive corruption within the Venezuelan government – a system constructed and controlled to enrich those at the highest levels of the government.” Barr continued: “The United States will not allow these corrupt Venezuelan officials to use the US banking system to move their illicit proceeds from South America nor further their criminal schemes.”
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