Venezuela's Bitcoin Claims Are Unlikely to Hold Water

Speculation has been circulating about the possibility of the Venezuelan government holding a secret bitcoin reserve, potentially worth over $60 billion. However, this claim appears to be based on speculation and unverified reports, lacking concrete evidence linking these funds to state-controlled wallets. As someone who was born and raised in Venezuela and has experience mining bitcoin in the country, I am skeptical about the regime's ability to hold a substantial secret stash of bitcoin, and I will explain why. The allegations surrounding the regime's bitcoin stash are based on three main claims: a large gold sale in 2018 that was supposedly swapped for bitcoin, oil revenue priced in bitcoin, and stolen or seized mining equipment. While I do believe that Venezuela has received payment for some oil sales in cryptocurrency, and it is true that the regime has stolen mining equipment, including some that belonged to my family, I have not seen credible evidence to support the claim that the 2018 gold sale was converted into bitcoin. The mastermind behind the alleged operation, Alex Saab, was in US custody from 2020 to 2023 and was released back to Venezuela in December 2023 as part of a prisoner exchange. At the time of his release, speculation suggested that he controlled an estimated $10-20 billion in bitcoin. However, this amount is highly unlikely, given the Venezuelan Central Bank's listed reserves at the time, which were approximately $9.9 billion and did not include any publicly disclosed bitcoin holdings. Furthermore, Saab's ability to direct complex financial operations while in US custody was limited, and there is no credible on-chain evidence linking him or the Venezuelan state to wallets of that scale. The proceeds from crypto sales are also unlikely to appear in Venezuela's official reserves due to the regime's history of extreme corruption. The corruption is so rampant that any meaningful value would likely be siphoned off into the pockets of corrupt officials rather than accruing to the regime's treasury. For example, in 2023, high-ranking officials were involved in a scandal embezzling billions of dollars through irregular oil sales to the state oil company, PDVSA. The regime has also consistently mismanaged complex operations, including strategic ones like PDVSA, which has been decimated since 1999. The country's chronic energy shortages, which result in programmed blackouts for over four hours a day, also make it challenging to set up large-scale mining operations. In conclusion, while I do think there is bitcoin in Venezuela, it is unlikely to be in the hands of the regime.