On 31st of January, an official announcement stated that the new cryptocurrency bill of Venezuela which has established a legal framework for the industry. The decree has published that in the government’s official media outlet, Gaceta Oficial. There are a certain set of rules for miners, entrepreneurs of the cryptocurrency and the regular traders were approved initially by the Constituent National Assembly an alternative to the country’s Parliament, created in 2017 in November 2018. The document titled as the “Constituent Decree on the Integral System of Crypto Assets” that contains 63 articles. This gives the short definitions of the key terms of the cryptocurrency, such as blockchain, mining, crypto assets, cryptography, etc.., It introduces the new concept of a sovereign crypto asset that any currency issued in Venezuela and authorized by the government. The decree also establishes that the obligatory licenses for mining entities and crypto exchanges, and introduces fines for the unlicensed activities.

The bill empowers the Sunacrip which is established in 2018, a national crypto watchdog in order to inspect the entirety crypto-related commercial activities in the country. According to Article 11, the body should monitor digital miners, exchanges and any other financial services that might serve as intermediaries in the Venezuelan crypto market. However, the same article states that Sunacrip will be able to control “creation, emission, transfer, commercialization and exchange” of all crypto actives within Venezuela. According to the Spanish-language crypto outlet, Reports from Criptonoticias stated that this part of the document gives Sunacrip the ability to control any commercial crypto platform in the country, be it local or international, centralized or decentralized.

Furthermore, the decree describes the registration procedures for crypto exchanges, wallets, and mining entities. Article 28 introduces several different types of licenses for crypto startups, depending on their trading volumes, types of crypto assets they manage and other criteria. The Sunacrip will reportedly consider all applications for licenses and establish public fees for crypto companies at its discretion. In case any crypto-related company violates the licensing rules or fails to register with Sunacrip properly, its owners can be punished with up to one to three years in prison, and fined 50 to 100 sovereign crypto assets 3,000 to 6,000 dollars.

The decree also states the Sunacrip can inspect mining companies and even confiscate the equipment if the business does not comply with newly introduced rules. As soon as the hardware is confiscated, it can be disposed of or used for “social purposes,” the article 37 reads. The Venezuelan oil-backed cryptocurrency, named Petro has launched earlier in October 2018 and is not mentioned in the decree. However, its characteristics match with the description of the sovereign crypto asset, as it was issued in Venezuela and approved by the government. Earlier this month, the reports of Cointelegraph stated that Venezuela is currently facing a severe economic crisis and political crisis. The self-proclaimed president of the country, Juan Guaido has supported by many local and international leaders who agree with the experts who previously had written that President Petro is nothing but a “smoke curtain” to cover up hyperinflation.

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