Two Venezuelans are arrested for mining bitcoin as an article published by state-sponsored news outlet stigmatises bitcoin use.

The publication on the Internet portal of the Сorporación Venezolana de Televisión (VTV) is written in blatantly Soviet style. It holds that while bitcoin is defended by “some mass media, technology experts and economists,” it is an illegal system favoured by cybercriminals, “affecting peace, political and economic stability of many countries in the world.” Therefore,

“Is it a coincidence if criminal groups and terrorists all over the world are the principal activists and defenders of bitcoin?”

Bitcoin, a preferred currency of the dark web, is used to sell weapons, drugs, pornography, hitmen services, pirated software, books, music and films, says VTV. Being anonymous, it satisfies those “who do not want to leave their fingerprints.”

In Venezuela, according to the article, bitcoin is used not only for tax evasion and money laundering but also with a subversive goal. Similar to those who trade US dollars on black market, bitcoiners are circumventing the government capital controls and “cause a great harm to the national economy,” pushing the inflation upwards.

“Who regulates this coin? How does it flow? – These questions have not found any answer. But it can be clearly said that its use affects negatively the national currency, the use of legal tender and political-economic growth,” concludes the article.

The publication probably means that the government of the Bolivarian Republic is going to adopt a harder line towards the cryptocurrency. And there is also a sign that the crypto is in demand. Last week, according to a local news outlet, two persons, a 31-year-old and a 46-year-old, were arrested in the city of Valencia for mining bitcoins with computer servers located in the Valencian industrial zone. The servers as well as four laptops were confiscated.

Venezuelan economy, largely dependent on petroleum export, is having hard times because of the decline in the oil prices. The official exchange rate of the national currency is only 10 bolívars for 1 USD. However, ordinary Venezuelans cannot buy dollar at such a price: on the black market 1 USD is worth more than 1,000 bolívars, according to DolarToday.

The possibility to exchange Venezuelan bolívar against other currencies remains very restricted because of the capital controls. This is one of the reasons bitcoin is so popular among Venezuelans. Another reason is state-subsidised electricity which makes bitcoin mining in the country tantalizingly cheap.

Alexey Tereshchenko