Venezuela Issued Officially Registered Crypto Regulatory Framework

According to a report published in the government’s official media outlet, Gaceta Oficial, Venezuela has issued new crypto bill establishing a set of new rules for crypto service providers including exchange platforms, crypto entrepreneurs, regular traders and miners in the nation. In November 2018 the bill was initially approved by the Constituent National Assembly(an alternative to the country’s Parliament) which was created in the year 2017. But, later the new bill officially came into force on 31st January.

The new crypto bill titled as “Constituent Decree on the Integral System of Crypto Assets” which contains 63 articles. It defined crypto terms such as crypto assets, the blockchain, mining, cryptography and also introduced the concept of a sovereign crypto asset (any currency issued in Venezuela and authorized by its government). The document got included in an official gazette published by the country’s Ministry of Popular Power for Communication and Information (MIPPCI) last week. The decree activated a new regulatory framework establishing obligatory licenses for all crypto entities like crypto miners and exchanges. Crypto entities involved in unlicensed activities will be charged with a fine.

Established in 2018, Sunacrip is a national crypto watchdog which has country’s superintendency of all crypto-related activities. All the crypto entities in the country have to get registered with Sunacrip. As per article 11, Sunacrip will monitor crypto miners, exchanges and other financial services which contribute as intermediaries in the crypto market of Venezuela. Sunacrip has the authority to control “creation, emission, transfer, commercialization and exchange” of all crypto actives within the nation.

With the powers of overseeing the day-to-day crypto activities and administrative-level execution of plans and programs, the regulator has become the highest crypto authority in the country. Hence, Sunacrip will inspect and audit of every crypto entity and have the authority to issue the licenses if they are found to be non-compliant. Any crypto firm if found non-compliant with the new set of rules will be subject to imprisonment of 1-3 years and a fine of 50-100 petros ($3,000 to $6,000).

Earlier the government indicated that it might restrict the number of crypto exchanges to operate in the nation. Venezuela is the only country which has launched its own national cryptocurrency. Donald Trump, the U.S. president ordered sanctions against the petro in March 2018 just after its launch. Nicolas Maduro, the president of Venezuela made many efforts aiming to increase the oil-backed petro adoption in the nation as well as abroad.

Venezuela will sidestep U.S. dollars and use petros for oil sales soon after appeal to OPEC for petro to become the “digital currency for oil” i.e, from the beginning of the year 2019, Maduro said in December 2018. It is also reported that the nation has started converting salaries and pensions into petro from the sovereign bolivar, its fiat currency. The nation began selling the national cryptocurrency (petro) to its citizens through a government portal from October 2018.

According to a report earlier this month, Venezuela is experiencing severe economic as well as political crisis. Juan Guaido, self-proclaimed president Venezuela agrees with experts who initially acclaimed that Petro is nothing but a “smoke curtain” to cover up hyperinflation.