Did Nicolas Maduro Use Crypto to Take Capital Out of Country?

An investigation in the Spanish press suggests the country’s regime may have transferred funds to an offshore exchange via Bitcoin (BTC) and other digital assets.

Nicolas Maduro, the Venezuelan president, may be more crypto-savvy than expected. After attempting the stunt with a national oil-backed crypto coin, the Petro, which never actually materialized, it has come to light that Maduro may have used solid digital coins to move funds out of the country and save his fortune from the hyperinflation everyone else suffered from.

Spanish media reported that a special company, Jetman Pay, was created to gather and hold international money inflows from tourist tax and charges on airline companies. This is one of Venezuela’s most certain inflows of hard currency. Part of the payments are in Venezuelan bolivar, a currency no one wants to have on their hands.

Once the funds are exchanged into Bitcoin, they can be moved to international markets, and transferred back to US dollars.

According to the ABC sources, the BTC are sold on exchanges in Russia, Hungary, Hong Kong and China, and then held into bank accounts abroad. Previously, the Petro was allegedly used to attract foreign funds for the Maduro regime. The Venezuelan government was banned from using US-based bank accounts, hence the creative redirecting of funds through digital currencies.

Venezuela is, paradoxically, one of the crypto-friendly countries in the world. Mining has been used as a hedge against inflation, as the country still produces extremely cheap electricity. But even that may be taken away, as the country started to suffer electricity outages.

The usage of digital currency was one of the ways for Maduro to circumvent the US embargo and take funds out of the country through a third party. While exchanging BTC and digital coins for fiat may be difficult for physical persons, firms can secure large-scale deals to cash out through OTC services.

Currently, Venezuela hosts only two Bitcoin nodes, a bare minimum, as hosting the blockchain is a resource-intensive task. Venezuela has used Bitcoin in the past years, potentially making gains from at least some stages of the bull market.