Venezuela’s new crypto bill, which establishes а legal framework for the industry, officially came into force on Jan. 31. The decree was published in the government’s official media outlet, Gaceta Oficial.

The set of rules for miners, crypto entrepreneurs and regular traders was initially approved by Constituent National Assembly — an alternative to the country’s Parliament, created in 2017 — in November, 2018.

The document titled “Constituent Decree on the Integral System of Crypto Assets” contains 63 articles. It gives short definitions of key crypto terms, such as crypto assets, blockchain, mining, cryptography, etc. It introduces the concept of a sovereign crypto asset — any currency issued in Venezuela and authorized by the government.

The decree also establishes obligatory licenses for mining entities and crypto exchanges, and introduces fines for unlicensed activities.

The bill empowers the Sunacrip — a national crypto watchdog established in 2018 — 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.

Moreover, the same article states that Sunacrip will be able to control “creation, emission, transfer, commercialization and exchange” of all crypto actives within Venezuela.

The Spanish-language crypto outlet Criptonoticias reported that this part of the document gives Sunacrip the ability to control any crypto commercial 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 properly register with Sunacrip, 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).

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 or used for “social purposes,” the article 37 reads.

Petro — the Venezuelan oil-backed cryptocurrency launched back in October 2018 — 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 government.

As Cointelegraph reported earlier this month, Venezuela is now facing a severe economic and political crisis. Juan Guaido — the self-proclaimed president of the country, supported by many local and international leaders — agrees with experts who previously wrote that Petro is nothing but a "smoke curtain" to cover up hyperinflation.