Venezuela

Venezuela shuts down crypto mining facilities, exchanges amid corruption probe

According to Venezuela’s attorney general office, government officials were running parallel oil operations with the assistance of the national crypto department.

Venezuela’s energy supplier has shut down crypto mining facilities throughout the country as part of a reorganization of the national crypto department and ongoing corruption investigations involving the country’s oil company.

According to local media reports, crypto mining companies, and tweets from Venezuela’s National Association of Cryptocurrencies, mining facilities were shut down in the past days in the states of Lara, Carabobo and Bolívar. It is unclear how many crypto firms were affected. Some crypto exchanges were also ordered to cease operations.

The closure of crypto mining facilities is believed to be part of an ongoing investigation of corruption involving Venezuela’s oil company PDVSA and the country’s crypto department. 

Venezuela’s attorney general, Tarek William Saab, disclosed on March 25 that government officials were allegedly running parallel oil operations with the assistance of the national crypto department. Saab commented on Twitter:

“This network used a conglomerate of commercial companies to legitimize the capital obtained from sales through the acquisition of crypto-assets, personal and real estate.“

According to Saab, at least 10 people have been arrested in connection with the investigations, including Joselit Ramirez Camacho, who led the crypto department since its inception in 2018, overseeing crypto tax rules and the country’s cryptocurrency PetroDollar (XPD). According to earlier reports, Camacho was arrested on March 17 as part of the investigation.

Since June 2020, Camacho has been listed in the United States Most Wanted List. At the time, Department of Homeland Security Investigators issued a bounty of up to $5 million for any information that would lead to the capture of the Petro’s supervisor. Authorities alleged that Camacho had “deep political, social and economic ties” to suspected narcotic kingpins, including Tareck El Aissami, the former vice president of Venezuela.

Venezuela’s president Nicolás Maduro announced the reorganization of the National Superintendency of Crypto Assets in a decree issued on March 17. Maduro’s administration claimed the decision was intended to protect the country’s citizens from the negative effects of economic sanctions, among other reasons.

Magazine: Best and worst countries for crypto taxes — plus crypto tax tips

Venezuela overhauls national crypto department

A new board headed by Anabel Pereira Fernández will lead the reorganization. The new team excludes Joselit Ramirez, who led the department since its inception in 2018 but was reportedly arrested on March 17 on corruption charges.

Venezuela’s president, Nicolás Maduro, announced the reorganization of the National Superintendency of Crypto Assets in a decree issued on March 17.

A new board will lead the restructuring, headed by Anabel Pereira Fernández, a lawyer who served as president of the Fondo de Garantía de Depositos y Protección Bancaria, the Venezuelan version of the United States Federal Deposit Insurance Corp. Among the other directors are Héctor Andrés Obregón Pérez, Luis Alberto Pérez González and Julio César Mora Sánchez.

Without providing any further details or specific reasons for the reorganization, the decree says the board will plan the next steps for the crypto department, known as Sunacrip in Spanish. Maduro’s administration claims the move is intended to protect the country’s citizens from the negative effects of economic sanctions, among other reasons.

The new board structure leaves out Joselit Ramirez, who has led the department since its inception in 2018. Ramirez was reportedly arrested on March 17 on corruption charges, according to Venezuela’s local media. At time of writing, Cointelegraph had not been able to confirm the information. Ramirez oversaw crypto tax rules and the country’s cryptocurrency Petro.

Related: Remittances drive ‘uneven, but swift’ crypto adoption in Latin America

In June 2020, the U.S. added Ramirez to its Most Wanted List. The Homeland Security Investigations branch of the U.S. Immigration and Customs Enforcement agency issued a bounty for up to $5 million for any information that would lead to the capture of Petro’s supervisor.

At the time, ​​authorities alleged that Ramirez had “deep political, social and economic ties” to suspected narcotic kingpins, including Tareck El Aissami, the former vice president of Venezuela.

Ramirez’s bounty was the smallest among the alleged co-conspirators, with the U.S. government offering $15 million for the capture of the country’s head, Maduro. Several other high-ranking officials, including El Aissami, face $10 million bounties.

Bitcoin is for billions: Fedimint on scaling BTC in the global south

A community custody protocol, Fedimint wants to scale the Bitcoin network to a billion users located in the global south.

“Bitcoin is for billions, not billionaires,” a phrase first coined by investment researcher Lyn Alden, could soon become a reality, according to Fedimint. 

The protocol that aims to scale Bitcoin (BTC) while making it more private has been buoyed by a $4.2 million seed round for the Fedi application.

Cointelegraph spoke to Obi Nwosu, co-founder and CEO of Fedi, about the “incredible group of inspiring people who we are working with to support their activities to increase the freedoms of some of the most oppressed regions of the world,” and why the mobile app Fedi could solve issues related to scaling, custody and privacy.

Lyudmyla Kozlovska, head of the Open Dialogue Foundation — which focuses on supporting people in post-soviet Europe — Farida Bemba Nabourema, a Togolese human rights activist, and Fadi Elsalameen, president of the Palestinian Security Project and a fellow at the Foreign Policy Institute at the Johns Hopkins School of Advanced International Studies, support the Fedi app’s development and its impact in the global south and emerging economies.

In brief, the Fedi wallet app connects users to Fedimint “federations.”  The Fedimint protocol (which takes its name from “federated” and “mint”) uses multi-signature (multisig) technology and trusted community members called guardians.

How Fedimint “federations” combine. Source: Twitter 

Nwosu told Cointelegraph that Fedi hopes to have the biggest impact on those located in the global south and that the firm is “uniquely placed to help which is why we will put special focus on deploying into these communities.”

Farida Nabourema, a Togolese human rights activist, explained to Cointelegraph that in “poor parts of the world,” acquiring a hardware wallet is near impossible. Hardware wallet distributors including Ledger, ColdCard and Trezor are not present on the continent of Africa, despite the fact that “Africa has the fastest growing adoption rate and Togo, for example, was listed among the top 10 countries having the fastest adoption per capita based on the 2021 Chainalysis report.”

The Fedi app may go some way in resolving these issues, allowing for greater exposure to Bitcoin in Africa, Nabourema continued:

“Fedimint solves a lot of our problems in one system. It offers us an extra layer of security to keep bitcoin purchase and ownership totally decentralized, anonymous and offers an extra layer of ownership.”

Nabourema details that the “federated wallet method” takes inspiration from the traditional savings methods used across Africa and emerging markets in the Caribbean and Latin America. Known as a “tontine” in francophone West Africa, a “sousou” in Nigeria, or a “zu-zu” in Trinidad and Tobago, these community savings tools help thousands of people to plan for their future. It’s among the oldest peer-to-peer savings technologies:

“This model has helped millions of people, especially women who were traditionally excluded from the banking system to fund their businesses, their children’s education, to acquire properties among others.”

Fedimint uses this community-backed approach to finance but uses a decentralized immutable currency i.e., Bitcoin. “In addition, Fedimint adds an extra layer of security and more importantly privacy as the custodians can keep the amount they own totally private from others,” Nabourema highlights. 

Nourou, the founder of Bitcoin Senegal — a grassroots Bitcoin adoption campaign located in the populous West African city of Dakar — told Cointelegraph that Fedimint’s community-backed approach is a reflection of how certain Bitcoin enthusiasts run nodes.

Related: Bitcoin in Zimbabwe: Importing cars and sending money to family

Nonetheless, the way in which the groups of trusted community members called “guardians“ interact with Bitcoin using Fedi remains unclear at this stage and could pose risks, he explained:

“In this instance, guardians would have more powers than others on the network, which could create centralization challenges. Plus, there could be a risk of certain people abusing their elevated responsibilities.”

Nwosu explained that “Fedimint is a federated custody protocol that complements the Bitcoin monetary protocol and Lightning payments protocol to provide a complete solution to holding, using, and securing Bitcoin at global scale.” Community custody is a brand new development in the Bitcoin protocol, while multisig, in which two or more signatories are required to move Bitcoin, has existed for almost a decade. 

Although Africa is a clear candidate for Bitcoin scaling and community-backed advancements, Nwosu told Cointelegraph that Leopoldo Lopez, the Venezuelan opposition leader who co-founded the political party Primero Justicia in the year 2000, has also shown interest. Reportedly, the solution that Fedi poses could “meet the needs of the people in Latin America at scale.”

Nabourema concluded that Fedimint will be “a lifesaver for millions of citizens living in developing worlds and most importantly those that face brutal authoritarianism at the hands of their government which tends to control their money and how they use it.”

Brazil beams Bitcoin from space: A case for BTC satellite nodes

Bitcoin’s blast off to becoming “space money” takes one giant leap with a satellite full node in Brazil.

A Bitcoiner in Brazil has beamed the blockchain from space. Alessandro Cecere, product manager at Ledn and a Venezuelan national, has established the purported first Bitcoin (BTC) satellite full node in Brazil. 

The full satellite node that Cecere has established downloads the Bitcoin blockchain directly from the Blockstream Satellite Network, negating the need for a reliable internet connection. It’s a small step for Bitcoin’s web of nodes but a giant leap for Bitcoin adoption, evincing that those in remote or hard-to-reach areas could run nodes.

Cecere poses with the satellite dish that receives the Bitcoin blockchain. Source: Cecere

A refresher for those new to nodes: A Bitcoin full node is software that continuously monitors the blockchain and its complete transaction history. A full node prohibits non-legitimate transactions and thwarts attempts to spend Bitcoin twice, known as a “double-spend.” Cecere explains that nodes “grant their owners decentralized access to the only uncensorable monetary network that we know of today.”

However, up until 2020, configuring a Bitcoin node (sometimes called a Bitcoin peer, as Bitcoin is a “peer-to-peer version of electronic cash”) was wholly dependent on local internet providers. Thanks to upgrades in Bitcoin company Blockstream’s Satellite Network, Bitcoin believers around the world can download a full node without an internet connection.

The satellite receiver from novra technologies. Source: Cecere

But, why does it matter? As Cecere explains: “Satellite Full Nodes are the next step to further decentralization of the Bitcoin network,” adding:

“The use case for Satellite Full Nodes could not be brighter. A few offline access points of these can fully connect remote communities to Bitcoin, even ones without prior internet access.”

There is a compelling case for satellite full nodes, particularly in countries that struggle with unstable governments, unreliable internet connections and weak digital infrastructure. In effect, a satellite full node can help more emerging countries and individuals without internet connections contribute and eventually participate in the Bitcoin network.

Bitcoin Gandalf (not his real name), of Braiins Bitcoin mining company explained to Cointelegraph that “using Blockstream satellite adds an additional level of redundancy should more traditional connectivity methods be interrupted.” 

In neighboring Venezuela, for example, a Bitcoin satellite node was installed in 2020. Venezuela benefits from a robust infrastructure of satellite dish networks, which as Cecere explains, “can be leveraged to expand Bitcoin’s offline signal on earth.”

Cecere connected to a Blockstream satellite from his homeland, after television network provider DirecTV left the country:

“I recycled a dish that DirecTV had installed at my parent’s house more than 10 years ago and turned it into an access point to the most powerful monetary network on Earth. That’s experiencing the power of borderless money at its utmost in the flesh!”

Venezuela is an increasingly pro-crypto nation, having experienced high levels of inflation since 2016. Across the border in Brazil, it’s another hotbed for adoption, particularly in light of a new bill that proposes protections for private keys as well as the legalization of crypto payments. The ability to run a satellite node in these countries as an offline connection point is a boon for adoption and the network’s resilience.

For Cecere’s satellite node in Venezuela, he “modernized`“ the dish with a clothes pin to assist the download of the blockchain. Source: Cecere

The Brazilian satellite full node Cessere built is connecting from a family member’s house in Santos, just south of Brazil’s largest city São Paulo . If the node runs successfully, the intention is to “port the equiment to Fundação Parque Tecnológico de Santos Gustavo,” a technology and innovation park where it will remain permanently connected as an offline connection point.   

Related: Bitcoin Lightning Network developer updates node software with Taproot support

However, the Bitcoin space signal has some limitations. Cecere explains it’s a “one-way street, since one can only download data from it but not push any; hence, they’re not capable of broadcasting transactions to the network.”

In the future, Blockstream may introduce an even more advanced version of their satellite equipment that may enable those with extremely limited access to internet access — such as crypto mining companies in far-flung destinations — to connect to Bitcoin.

Then, and only then will Bitcoin take on the mantle of being “space money.”