Recent speculation suggests that the Venezuelan regime may hold a secret stash of bitcoin, potentially valued at more than $60 billion. But the claim appears to be based on conjecture and second-hand reports, in the absence of credible on-chain evidence linking these funds to state-controlled wallets. As a born and raised Venezuelan who has mined Bitcoin in the country for years, I don’t believe the Venezuelan regime holds a huge secret stash of Bitcoin, and I’ll tell you why.
First, let’s break down the allegations. Claims in several articles suggest that the sources of the regime’s bitcoin reserve were:
1) A big sale of gold, exchanged for Bitcoin in 2018;
2) Oil revenues valued in Bitcoin; And
3) Stolen/seized mining equipment.
I believe, and this has also been reported, that Venezuela received payment for some oil sales in crypto. And I know for a fact that he stole mining equipment – some of it belonged to my family. I have not seen credible evidence that the 2018 gold sale was converted to Bitcoin, and given what we know about the major players, it is unlikely.
Why is it unlikely that the alleged $2.7 billion gold sale in 2018 was converted to Bitcoin?
The alleged mastermind of the operation, Alex Saab, the current Minister of Industry and National Production, was detained in the United States from 2020 to 2023. Former President Joe Biden’s administration released him to Venezuela in December 2023 as part of a prisoner exchange. At the time of his release, according to widespread speculation, the amount of BTC he controlled was estimated to be between $10 billion and $20 billion.
As a reminder, the Venezuelan Central Bank’s listed reserves at the time of its release were approximately $9.9 billion, and these official reserves did not include any publicly identified BTC disclosures. If Saab actually controlled about twice the reserves reported by the Venezuelan Central Bank before its release, that certainly doesn’t match public records. Additionally, Saab spent years in U.S. custody, with limited ability to direct complex financial operations, not to mention the absence of any credible on-chain attribution linking portfolios of this scale to him or the Venezuelan state.
Why are proceeds from cryptocurrency sales unlikely to appear in Venezuela’s official reserves?
The regimes of Hugo Chavez and Nicolas Maduro have a long, well-documented history of extreme corruption. Venezuela’s extreme corruption would not have allowed significant value to be accumulated in the regime’s treasury. There are too many examples of corruption to list, but let’s focus specifically on SUNACRIP, the so-called crypto regulator set up by the regime. In March 2023, there was a scandal involving corrupt high-ranking officials personally embezzling billions of dollars, via irregular oil sales to the state oil company, PDVSA. From 2020 to 2023, these officials stole approximately $17.6 billion. In other words, any “profits” beyond what PDVSA barely needs to exist have most likely been siphoned into the pockets of corrupt members of the regime.
What about income from mining stolen mining equipment?
The regime has a long history of mismanagement of complex operations, even strategic ones like PDVSA. In addition to the thousands of private companies he has expropriated and bankrupted since 1999, he has decimated the crown jewel: the state oil company PDVSA. Between 1999 and today, the regime has transformed PDVSA from a world-class oil production company producing 3.5 million barrels per day to an anemic operation with a capacity of only 800,000 barrels per day. The regime cannot function effectively, even if it steals or inherits advanced equipment.
Another reason is the chronic energy shortage ravaging the country. Although Venezuela is rich in oil reserves, the country’s electrical infrastructure is in such a state that citizens across the country suffer from scheduled power outages lasting more than four hours every day, sometimes several times a day. The country’s power grid remains fragile due to chronic underinvestment, poor infrastructure maintenance (particularly the Guri Dam hydroelectric complex, which provides approximately 70 to 80 percent of Venezuela’s electricity), loss of skilled workers to emigration, and reliance on aging systems. This leads to both unplanned outages and deliberate rationing to avoid complete collapses.
Unpredictable and unreliable energy sources present challenges when setting up large-scale mining operations in less than ideal conditions (remember we’re not talking about pristine data centers here – the wear and tear on these machines is tough, I’ve seen it with my own eyes).
In short, I think there is Bitcoin in Venezuela. It’s simply not in the hands of the regime.
