Recent speculation suggests that the Venezuelan regime could be keeping a secret stash of bitcoin, potentially valued at upwards of $60 billion. But the claim appears to be rooted in conjecture and second-hand reporting that lacks credible onchain evidence tying these funds to government-controlled wallets. As a born and raised Venezuelan who has mined bitcoin in the country for years, I do not believe that the Venezuelan regime has a massive secret stash of bitcoin, and I will explain why.
First, let’s break down the claims. The claims of several articles suggest that the sources of the regime’s bitcoin stash were:
1) A big gold sale, swapped for bitcoin in 2018;
2) Oil revenues priced in bitcoin; and
3) Stolen/confiscated mining equipment.
I believe and it has also been reported that Venezuela received payment for some oil sales in crypto. And I know for a fact that it stole mining equipment – some of it was my family’s. I have not seen credible evidence that the 2018 gold sales were converted to bitcoin, and given what we know about the key players, it is unlikely.
Why is it unlikely that the alleged $2.7 billion in gold sales back in 2018 were converted to bitcoin?
The alleged mastermind of the operation, Alex Saab, the current Secretary of Industry and National Production, was in US custody from 2020 to 2023. Former President Joe Biden’s administration released him back to Venezuela in December 2023 as part of a prisoner exchange. At the time of his release, according to swirling speculation, the amount of BTC he controlled would have been worth an estimated $10-$20 billion.
For context, the Venezuelan central bank’s listed reserves at the time of his release were ~$9.9 billion, and those official reserves did not include any publicly identified BTC information. If Saab really did control ~2X the Venezuelan central bank’s reported reserves before he was released, that certainly doesn’t match the public record. Furthermore, Saab spent years in US custody, with limited ability to direct complex financial operations, not to mention the absence of any credible onchain attribution linking wallets of that size to him or the Venezuelan state.
Why are proceeds from crypto sales unlikely to show up in Venezuela’s official reserves?
The regimes of Hugo Chavez and Nicolas Maduro have a long and well-documented history of extreme corruption. Venezuela’s extreme corruption would not have allowed any meaningful value to accrue to the regime’s coffers. There are too many examples of corruption to mention, but let’s focus specifically on SUNACRIP, the supposed crypto regulator created by the regime. Back in March 2023, there was a scandal involving senior corrupt officials who personally embezzled billions of dollars through irregular oil sales to the state oil company, PDVSA. From 2020-2023, these officials stole an estimated $17.6 billion. In other words, any “profit” beyond what PDVSA needs to exist has most likely been siphoned into the pockets of corrupt members of the regime.
What about income from operating stolen mining equipment?
The regime has a long track record of mismanaging complex operations – even strategic ones like PDVSA. In addition to the thousands of private companies it expropriated and bankrupted since 1999, it decimated the crown jewel – the state-owned oil company, PDVSA. Between 1999 and today, the regime took PDVSA from a world-class oil producer 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 when it steals or inherits the latest equipment.
Another reason is the chronic energy shortage that ravages the country. Although Venezuela is rich in oil reserves, the country’s electrical infrastructure is in such poor condition that citizens across the country suffer from programmed blackouts for over four hours each day, sometimes several times a day. The country’s electricity grid remains fragile due to chronic underinvestment, poor infrastructure maintenance (especially the Guri Dam hydroelectric complex, which supplies ~70-80% of Venezuela’s electricity), loss of skilled labor from emigration, and reliance on aging systems. This leads to both unplanned outages and deliberate rationing to prevent total collapse.
Unpredictable and unreliable energy sources present challenges when setting up large mining operations in less than ideal conditions (remember, these aren’t pristine data centers we’re talking about here – wear and tear on these machines is hard, I’ve seen it firsthand).
In short, I think there is Bitcoin in Venezuela. It’s just not in the hands of the regime.
