Purse.io’s head of support Eduardo Gomez has blown the whistle on more corruption coming from the Venezuelan government, this time in the form of illegally obtained mining rigs.
Mining Rigs Seized
In April 2018, the Economist first ran an article questioning the rate of bitcoin mining in Venezuela. The outlet claimed that, at the time, President Nicolas Maduro was using government ownership of the electrical grid to locate and crackdown on bitcoin miners. Corrupt authorities and officials were then reported to be seizing the mining rigs for their own personal gain,
Mining equipment has been seized by officials, some of which was then used for their own gain. While bitcoin can protect from the tyranny of governments printing money, other kinds of tyranny remain unchecked.
In August, bitcoin miner Juan Blanco shared his experience on Twitter of having the police intimidate and threaten to seize his mining rigs, despite having no legal reason to do so.
More recently, Purse.io’s head of support Eduardo Gomez took to Twitter to shed more light on the illegal practice.
Gomez said the Venezuelan government has been illegally seizing mining rigs to obtain bitcoin and ethereum. However, the government is caught in a situation with no clear outlet to unload the coins.
How Venezuela came to own Bitcoin or Ethereum? The Bloomberg article didn't say. But you can ask any Venezuelan: The corrupt goverment officials mined crypto with seized and stolen equipment, now they find themselves with coins they cannot exchange. 1/3— ⚡🇦🇷Eduardo🇻🇪⚡ (@Codiox) September 26, 2019
Gomez continued, explaining that the central bank will be used to launder the funds.
The goverment officials may have used PDVSA as a front to 'acquire' mining equipment with the national budget. The central bank will be used to launder the proceeds of the crypto they have. PDVSA management is known to engage in deeply corrupt practices.👇https://t.co/EaZrZpNmzy— ⚡🇦🇷Eduardo🇻🇪⚡ (@Codiox) September 26, 2019
As Gomez points out, in addition to improperly seizing mining rigs from citizens, the crypto being generated by Venezuelan government officials will not be used to help benefit the country’s population as a whole.
One might think that since the central bank will do custody and facilitate the exchange of the coins, the money is going to benefit the country as a whole in the form of international reserves. It won't. The Government elite has discretionary control over the reserves. 2/3— ⚡🇦🇷Eduardo🇻🇪⚡ (@Codiox) September 26, 2019
Corruption in Venezuela has become a common story over the years, with the government struggling to bring an end to the hyperinflation impacting their national fiat currency.
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