Venezuela’s New crypto legal framework is now effective as published by a media outlet of the country, Gaceta Oficial. The legal framework enforced through a decree became effective in the country since 31st of January.
The New Venezuelan Crypto Legal Framework
The new Venezuelan crypto legal framework entails rules for miners, crypto entrepreneurs, and regular traders. This was initially approved by the constituent’s national assembly in November 2018. The constituent assembly is an alternative to the parliament of the country and was created in 2017.
The legal framework is contained in the document titled “Constituent Decree on the Integral System of Crypto Assets,” and it contains 63 articles. Also, the articles have short definitions of key crypto terms such as crypto assets, the blockchain, mining, cryptography, among others. And there was also the introduction of the concept of sovereign crypto assets which refers to any currency issued in Venezuela and authorized by the government.
The Crypto Regulator’s Role In Venezuela
The legal framework placed the role of crypto regulations under the influence of Sunacrip, a national crypto watchdog. The agency which was established in 2018 is saddled with the responsibility of inspecting the entirety crypto related commercial activities in the country. This is bestowed on the agency by article 11 of the legal framework which stated that it has the role of monitoring digital miners, exchanges, and any other financial services that might serve as an intermediary in Venezuela’s cryptocurrency market. This will see the agency take up the role of controlling and the creation, emission, transfer, commercialization, and exchange activities in the country.
Further, the role of issuance of licenses of operation to various crypto firms will be considered by the crypto watchdog. According to article 28, different types of licenses for crypto startups will be considered based on their trading volume, types of crypto assets they manage and other criteria. Meanwhile, failure to comply to the necessary registration procedures by any firm with Sunacrip could lead to a penalty of one to three years in prison and fine of 50 to 100 sovereign crypto assets ($3,000 to $6,000).
Crypto Adoption In Venezuela
Venezuela has seen wide crypto adoption in recent time especially as the citizens of the country sees it as the alternative to the national currency of the country that has been rendered valueless due to inflation. This has made it the perfect store of value and used for its citizens.
Also, the national currency of the country which was not mentioned in the crypto legal framework was introduced to salvage the nation’s economy.