Recent speculation suggests that the Venezuelan regime could have a secret stash of bitcoins, potentially valued at more than $60 billion. But the claim appears to be based on conjecture and secondhand reporting, and lacks credible on-chain evidence linking those funds to state-controlled wallets. As a born and raised Venezuelan who mined bitcoins in the country for years, I do not believe that the Venezuelan regime has a massive secret stash of bitcoins, and I will explain why.
First, let’s look at the allegations. Claims in several articles suggest that the sources of the regime’s bitcoin stash were:
1) A large sale of gold, exchanged for bitcoin in 2018;
2) Oil revenues quoted in bitcoins; and
3) Stolen/seized mining equipment.
I believe, and it has also been reported, that Venezuela received payments for some oil sales in cryptocurrency. And I know for a fact that he stole mining equipment; some of them were from my family. I have seen no credible evidence that the 2018 gold sale was converted into bitcoin, and given what we know about the key 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, current Minister 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 speculation, the amount of BTC he controlled would have been worth an estimated between $10 and $20 billion.
To put it in context, the listed reserves of the Central Bank of Venezuela at the time of publication were ~$9.9 billion, and those official reserves did not include any publicly identified BTC disclosures. If Saab really controlled ~2 times the reserves declared by the Central Bank of Venezuela before being released, it certainly does not 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 on-chain attribution linking portfolios of that scale to him or the Venezuelan state.
Why is income from cryptocurrency sales unlikely to appear in Venezuela’s official reserves?
The regimes of Hugo Chávez and Nicolás Maduro have a long and well-documented history of extreme corruption. Venezuela’s extreme corruption would not have allowed any significant value to accumulate in the regime’s coffers. There are too many examples of corruption to list, but let’s focus specifically on SUNACRIP, the supposed crypto regulator created by the regime. In March 2023, there was a scandal involving high-ranking corrupt officials who personally embezzled billions of dollars, through irregular oil sales to the state oil company, PDVSA. Between 2020 and 2023, these officials stole approximately $17.6 billion. In other words, any “profit” beyond what PDVSA needs to barely exist has likely been diverted into the pockets of corrupt members of the regime.
What happens to the income from the operation of 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 that it expropriated and bankrupted since 1999, it decimated the jewel in the crown: the state oil company PDVSA. Between 1999 and today, the regime took PDVSA from a world-class oil producing 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 operate effectively, even when it steals or inherits cutting-edge equipment.
Another reason is the chronic energy shortage plaguing the country. Although Venezuela is rich in oil reserves, the country’s electrical infrastructure is in such poor condition that citizens across the country experience scheduled blackouts for more than four hours a day, sometimes several times a day. The country’s power grid remains fragile due to chronic underinvestment, poor maintenance of infrastructure (especially the Guri Dam hydroelectric complex, which supplies 70% to 80% of Venezuela’s energy), loss of skilled workers due to emigration, and reliance on outdated systems. This leads to both unplanned outages and deliberate rationing to avoid total collapses.
Unpredictable and unreliable power sources present challenges when setting up large-scale mining operations in non-ideal conditions (remember, we’re not talking about pristine data centers; wear and tear on these machines is difficult, I’ve seen it firsthand).
In short, I think there is Bitcoin in Venezuela. It is simply not in the hands of the regime.
