Venezuela Introduces New Regulatory Framework for Domestic Crypto Startups

Venezuela has introduced a new regulatory framework for domestic crypto startups, including digital currency trading platforms as well as crypto mining firms.

As detailed in last week’s official gazette published by the country’s Ministry of Popular Power for Communication and Information (MIPPCI), the “Constituent Decree on the Integral System of Crypto Assets” outlines a new regulatory framework that would require domestic businesses working with digital assets to register with Venezuela’s governing body tasked to oversee crypto-related activities.

The registration requirements will now be set by Sunacrip, which will be subsequently disseminated across domestic firms encompassed by the new regulatory measure. Firms which fail to meet the delineated registration requirements will be facing a penalty equivalent to 100 to 300 Petros, Venezuela’s national fiat.

With the enactment of the new decree, Sunacrip will now become the highest regulatory agency overseeing the domestic crypto sector in the country, with its purview encompassing daily supervision of crypto-related activities, as well as administrative-level execution of programs and other initiatives related to the sector.

The decree is comprised of 63 articles, from setting definitions of crypto jargon, the regulator’s remit, requirements for business registration and audit, as well as sanctions for non-compliance or illicit activities.

Furthermore, the regulator will also be responsible for conducting investigations and auditing inspections, with authority to revoke licenses should a business be found to be either non-compliant or pose a threat to the public, in which case the company could potentially face a one to three-year imprisonment, on top of a penalty worth anywhere between 50 to 100 Petros, as well as confiscation of crypto mining hardware for domestic crypto mining companies.

As per a previous announcement, the government of Venezuela has indicated plans of limiting the number of crypto startups operating in the territory.

Venezuela is one among a handful of other nations that have previously introduced its own sovereign digital currency in an effort to circumvent the economic sanctions previously imposed by the U.S. administration against the country last year. Since its launch, Venezuelan President Nicolas Maduro has spearheaded multiple initiatives in an attempt to promote the large-scale adoption of the oil-backed native crypto, Petro, both domestically and overseas.

In October, the government of Venezuela has officially declared state-backed cryptocurrency Petro as the country’s official national currency.

In December, Maduro declared that the country will be using Petro for selling oil, with plans of pushing for the legitimization of the token as the “digital currency for oil.”

In addition, the Venezuelan government has also begun converting employee remunerations as well as pensions from the country’s fiat currency Bolivar to its digital currency Petro, while mandating banks as well as businesses to use the token.