Venezuela is once more a center of attention, showcasing its ongoing clash with political instability and economic challenges. This time, the spotlight is on its newly announced crypto regulations, scheduled to take effect shortly.
Bringing the Hammer Down
A legislative framework called ‘Constituent Decree on the Integral System of Crypto Assets,’ unveiled on January 31, lays down comprehensive regulations governing cryptocurrency-related activities. The framework, comprising 63 articles, intricately defines multiple key aspects within the crypto world, such as blockchain, mining, and digital assets.
The legislation also prominently stresses that any crypto deemed 'acceptable' must carry a governmental license and originate from Venezuela. This stipulation hints at an apparent favoritism towards domestic digital currencies, mainly backed by the state. the petro Launched amid controversy roughly a year ago in 2018, Venezuela’s own digital currency faced skepticism regarding its proclaimed backing by the country's vast oil reserves—an assertion that caused many to raise eyebrows. whitepaper makes no mention of .
The Controversy Continues
President Maduro boldly declared that billions of units of the state-backed digital currency were sold during its opening ICO days, a claim under continual scrutiny. Later, he proposed paying Venezuelan employees in this currency instead of the hyperinflated bolivars, marking a strategic monetary shift. only the petro could be used to cover passport fees.
Facing such controversies, President Trump resorted to banning all trading involving this particular cryptocurrency in the U.S. Despite the implications of the new bill, it remains uncertain if its true intent is to elevate this specific currency or open opportunities for other digital currencies such as Bitcoin and Ethereum.
What’s in Place, Here?
The newly adopted legal framework intends to tightly regulate mining endeavors and oversee crypto-business activities throughout Venezuela, proposing strategies for traders and enthusiasts alike. Formulated by the Constituent National Assembly, it acts as a regulatory substitute to the Venezuelan Parliament since its conception in 2017.
The initial drafts painted a challenging picture for crypto traders, imposing strict penalties and protocols on unlicensed operations. Inspiration seems drawn from regulatory entities like the SEC, which closely monitor and penalize unregistered securities offerings.
Cases such as Paragon Coin and AirFox illustrate this regulatory rigor, each facing $250,000 fines for their non-compliance, an outcome their executives admitted accepting to avoid harsher penalties. wrath include one against In Venezuela, regulatory duties are assumed by Sunacrip, an agency overseeing crypto enterprises and scrutinizing mining activities, with the power to seize equipment if businesses deviate from the rules.
New Political Developments
Venezuelan political strife triggered President Maduro to rhetorically question a possible 'Vietnam scenario,' urging Trump against intervening militarily, as it could permanently tarnish his presidency.
Recently, President Donald Trump explained that military action President Maduro later articulated a hope for peace, dismissing the likelihood of martial conflict, even as Trump's words were perceived as aggression.
Maduro remarked, 'There exists a looming threat. I cannot definitively speak of a direct risk, but the threat presented itself in August 2018, marking Trump’s initial contemplation of military involvement in Venezuela.'
Nick Marinoff, a seasoned cryptocurrency journalist since 2014, has contributed as a lead content writer and editor for Money & Tech, served as PR writer for Game Credits, and held senior writer roles at Bitcoinist and News BTC.
