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Venezuela Introduces New Cryptocurrency Rules

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Amid political turmoil in Venezuela, the government issued a decree establishing a legal framework for cryptocurrencies in the country.

The elaborate decree, consisting 63 articles, has set rules for the purchase, sale, use, distribution, and exchange of cryptocurrencies and related products. It also made a registration system mandatory.

One rule says heavy penalties, equivalent to 100 to 300 sovereign crypto assets, will be imposed for unlicensed crypto activities.

Another rule stipulates imprisonment of up to three years and a fine equivalent of 50-100 sovereign crypto assets to those who have obtained, accessed, intercepted, interfered or used "information technologies related to the Integral System of Crypto Assets" without proper authorization.

The "Constituent Decree on the Integral System of Crypto Assets" details audit procedures, penalties for non-compliance, and how mining equipment can be confiscated.

The decree came into force as it was was published in the official gazette on January 31.

The first section of the decree defines blockchain, digital mining, crypto asset, sovereign crypto asset, cryptography, user, and public price.

Other sections explain the "structure of the Integral System of Crypto Assets", set rules for the new registration system, detail the audit and inspection procedures, discuss offenses and penalties, and describe administrative procedures.

Sunacrip, which is the regulator of all crypto-related activities in Venezuela, has been empowered with enforcing the decree.

Specifically, it will regulate the creation, issuance, organization, operation and use of crypto assets, and the operation of the exchange houses and other crypto asset financial services, as well as activities associated with digital mining.

Potential cryptocurrency operators - firms and individuals - are required to register with Sunacrip.

Non-compliance with the rules will attract confiscation of mining equipment and the suspension of license.

As the all-powerful crypto currency market regulator, Sunacrip will reportedly wield the authority to monitor any commercial cryptocurrency platform in Venezuela.

The Maduro administration has adopted Petro as Venezuela's national cryptocurrency to ease the country's economic crisis, and circumvent U.S.-led sanctions.

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