Venezuela has been a cryptocurrency hotbed in recent years, with President Nicolas Maduro promoting cryptocurrencies as tools to reactivate the country’s economy. However, the situation has taken a turn for the worse in recent days, with the arrest of Joselit Ramirez, Venezuela’s Superintendent of Cryptoassets, and President Maduro’s order to restructure the country’s crypto regulatory agency. This article provides an overview of the recent crackdown on cryptocurrency in Venezuela, including the closure of all registered cryptocurrency exchanges and large mining farms.

The Closure of Cryptocurrency Exchanges and Mining Farms

The new Superintendent of Cryptoassets in Venezuela is reportedly unhappy with the way the cryptocurrency industry has developed and has ordered the closure of all cryptocurrency exchanges registered with the country’s crypto regulator, the National Superintendency of Cryptoassets (Sunacrip). The closure has not been officially confirmed, but the National Association of Cryptocurrencies in Venezuela has stated that such actions are taking place as part of an anti-corruption investigation that has resulted in the arrest of Joselit Ramirez and his political protector, Tareck el Aissami, the Minister of Energy and Petroleum.

The closure of cryptocurrency exchanges has prompted a response from Asonacrip, the national association of cryptocurrencies in Venezuela. The association is preparing a list of recommendations to deliver to Sunacrip and the new head of the organization, Dr. Anabel Pereira. Asonacrip has also opened a public survey to allow cryptocurrency enthusiasts to provide input on the recommendations.

In addition to the closure of cryptocurrency exchanges, Sunacrip has also ordered the closure of large cryptocurrency mining farms operating in several states in Venezuela. Asonacrip has called for a review of these actions, noting that the vast majority of the mining farms were operational and complied with all necessary permits.

The Centralization of Power and Corruption

The recent crackdown on cryptocurrency in Venezuela represents a 180-degree turn from previous years when President Maduro called for the promotion of cryptocurrencies as tools to reactivate Venezuela’s economy. During this period, the government legalized cryptocurrency, created its own official cryptocurrency (The Petro), established a regulatory framework for mining, institutionalized the registration of cryptocurrency exchanges, and began efforts to reduce the persecution of traders and miners who were seen as operators in the parallel currency market.

However, the centralization of power in Sunacrip also opened the doors to new forms of corruption. Sunacrip’s participation in a diversion of funds from undeclared oil sales is being investigated, with reports of irregularities circulating on social media, such as high-ranking government executives owning cryptocurrency mining farms, influence peddling, arbitrary detentions, and equipment confiscations.

Clarification from Cryptocurrency Exchange Platforms

There has been confusion surrounding the closure of cryptocurrency exchanges in Venezuela. Cryptobuyer Venezuela’s CEO, Eleazar Colmenares, denied rumors that Sunacrip had ordered the closure of cryptocurrency exchange platforms in the country, stating that the announcement made by the platform referred to the temporary non-operation of their crypto-fiat gateway service due to a transition process carried out by the competent authorities. However, Sunacrip has not made an official statement to clarify the situation or set a roadmap for the new directors’ plans regarding cryptocurrency users, traders, miners, and exchanges.

The recent crackdown on cryptocurrency in Venezuela has created uncertainty and confusion in the country’s cryptocurrency scene. The closure of cryptocurrency exchanges and large mining farms, as well as allegations of corruption, have prompted a response from Asonacrip, which is preparing recommendations to deliver to Sunacrip. While it appears that the closure of cryptocurrency exchanges may be temporary, the lack of official clarification from Sunacrip has left cryptocurrency enthusiasts in Venezuela unsure about the future of their industry.