Venezuela is once again in the news. Between the people’s revolution, opposition from a new leader and President Maduro’s anger towards Trump, it seems the country is an ongoing hotspot for both economic and political strife, but now the country has released a new set of crypto rules set to take effect in the coming days.
Bringing the Hammer Down
In a new bill entitled “Constituent Degree on the Integral System of Crypto Assets” first published on January 31, Venezuela has completed an official framework of regulations that can and will pertain to cryptocurrency activity. The bill contains 63 separate articles, and defines several cryptocurrency aspects and terms including blockchain, mining and digital assets.
In addition, the bill also mentions that any “acceptable” form of crypto is one licensed by the government and issued in Venezuela. One could easily take this as a primary push for the petro, issued roughly one year ago in 2018. The coin has been enveloped in controversy since making its official debut, starting with claims that it was backed by the country’s many oil reserves – something the coin’s whitepaper makes no mention of.
The Controversy Continues
Furthermore, President Maduro said that billions in petro units had been sold within the first few days of the currency’s initial coin offering (ICO), another statement that has been questioned time and time again. Maduro later issued a new plan that would allow Venezuelan workers to be paid in petro funds rather than bolivars, which had fallen greatly in value thanks to rapid inflation. It was also decided that only the petro could be used to cover passport fees.
The currency has proven so controversial that President Donald Trump ultimately chose to ban all respective petro-trading in the United States. At the time of writing, it’s unclear if the new bill is designed to strictly push petro usage or if it will ultimately embrace all forms of digital currency including bitcoin, ether tokens, Litecoin and bitcoin cash.
What’s in Place, Here?
The new bill is set to regulate mining activity and govern cryptocurrency entrepreneurs. New rules are also in place for everyday traders and enthusiasts. Passed by the Constituent National Assembly, the document was first written two years ago in 2017 as an alternative to Venezuela’s Parliament.
The first draft of the bill proves to be very harsh on cryptocurrency traders, instilling hardcore regulations and penalties for those who engage in unlicensed activities. To be fair, it seems the bill is taking some influence from organizations like the Securities and Exchange Commission (SEC), a body that has been cracking down hard on companies that fail to register their digital assets as securities.
Among the most recent cases of the SEC’s wrath include one against Paragon Coin and AirFox. Both companies were slapped with $250,000 fines after failing to properly register their ICOs. Executives of both ventures later said they were fine with the outcome and glad that things weren’t any worse.
New Political Developments
Last year, the regulatory agency Sunacrip came to power in Venezuela. The organization has been tasked with monitoring cryptocurrency businesses throughout the nation and inspecting mining groups. Granted these firms are not playing by the rules, Sunacrip can confiscate their equipment.
Recently, President Donald Trump explained that military action was an “option” when it came to the civil unrest in Venezuela. In response, Maduro asked Trump if he “really wanted another Vietnam,” saying that his presidency would be forever marred and “stained with blood” granted he chose to interfere in the country’s political environment.
In a later statement, Maduro claimed he didn’t see war happening in his country anytime soon, and that he viewed Trump’s words as hostile. He stated:
“There is a threat. I can’t say that there is risk, but there is a threat that stared in August 2018. It was the first time Trump spoke about military intervention in Venezuela.”
