Report: Established Obligations in the Venezuelan Legal Framework for Domestic and Foreign Companies Wishing to Engage in Commercial Activities Regarding Digital Mining, Blockchain, Trading and Other and Conexus Activities

in #venezuela2 years ago (edited)

Established Obligations in the Venezuelan Legal Framework for Domestic and Foreign Companies Wishing to Engage in Commercial Activities Regarding Digital Mining, Blockchain, Trading and Other and Conexus Activities.

REPORT_  “Established Obligations in the Venezuelan Legal.png

With the enforcement of the "Ley del Sistema Integral de Criptoactivos" (in English: “Law of Integral Cryptoassets System”) on January 30, 2019 and the subsequent promulgation of another rule called "Providencia mediante la cual se regula el Registro Integral de Servicios de Criptoactivos" (In English “Providence regulating the Comprehensive Registry of Cryptoactive Services”) on February 4, 2019, Venezuela already has a series of legal bases that will generally govern and regulate multiple service activities, along with its different commercial relations of the companies and natural persons, that have as activity the exchange and operation of cryptoactives, blockchain, trading, digital mining and its different related and conexus activities, given that these regulations allow and give a character of legitimacy and legality to the multiple activities before mentioned given these have some form of representation and commercialization within the Venezuelan territory.

It is important to point out and clarify, in accordance with the preceding paragraph, that the Law and its Providence cover in principle companies and natural persons whose fiscal residency is within the Bolivarian Republic of Venezuela; however, in the case of foreign companies or legal persons whose domicile is outside Venezuela and who wish to exercise activities of services, operation, issuance, exchange of cryptoactives, blockchain, trading, digital mining and its various related activities, are also subject to the application of the rule as long as their activity and operability is to be exercised in a face-to-face manner within the Venezuelan jurisdiction or territory and that simultaneously there is a physical and tangible presence of individuals, workers or representatives of foreign companies, as well as a physical and tangible presence of mining objects and equipment or computer or electronic devices; since in the event that foreign companies are not going to have a presence of personnel or electronic equipment in Venezuela, they are not subject to the mandatory provisions of the Law and its Providence, since these two (2) legal provisions do not enjoy "extraterritoriality", due to the fact that it is a rule created and promulgated only to exercise its authority within Venezuelan territory.

Established the above and to the existence of a juridical framework already promulgated in Venezuela, is to analyze according to the law that these two (2) norms are of obligatory fulfillment within the Venezuelan jurisdiction and it is to emphasize that the first step so that the natural and juridical persons that are foreign or not that wish to carry out activities like exchange of goods, services, values, operation, exchange of cryptoactives, blockchain, trading, is the “registration” in order to obtain the RISEC, which is the authorization or license granted by the Venezuelan State through the Law to natural and juridical persons to legally practice the different digital mining activities and their different forms of services, functionality, exchange and commercialization.

Upon knowing the above, the Article 30 of the Law of the Integral System of Cryptoactives, defines the obligation of "registration" for natural and legal persons who intend to develop and/or are already developing in Venezuelan soil any commercial activity with cryptoactives and their various activities of exchange and commercialization that are related and will be through a record of information, which will be administered through the National Superintendence of Cryptoactives (SUNACRIP) and will have its main office in the City of Caracas, who will inspect and supervise it, since SUNACRIP (for its acronym in Spanish) is a public entity created by Law to supervise and regulate everything related to the virtual mining sector of cryptoassets and its other activities of services, exchange, stock, issuance and operation.

However, the steps to be followed by individuals or companies residing in Venezuela or foreign companies that have any type of interest in having personnel presence or any electronic, computer or mining equipment and that intend to make some kind of commercialization, exchange of cryptoactive services and their functioning, blockchain, trading, digital mining and its various conexus and related activities within the national territory, must comply compulsorily with the provisions of the aforementioned Article 30 of the Law of the Integral System of Cryptoactives to obtain the RISEC through registration, procedure that is established in Articles 8 and 9 of the "Providence through which regulates the Integral Registry of Cryptoactives Services", in which the aforementioned articles constitute the steps that must be complied with to obtain the authorization, together with a series of requirements, which are detailed below:

Article 8.- Enter the web portal www.sunacrip.gob.ve to register and access the RISEC platform, then complete and accept the requested questionnaire, which are identification and address of natural or legal persons, identification of their representatives, digital subscription of the Affidavit that the funds allocated come from lawful activities, as well as other documents required in Article 9 must be uploaded digitally, which are:

Article 9.- Natural Person:

  • Valid Identity Card or Passport.
  • Front Facing Photo
  • Any other document requested by SUNACRIP. (May be interpreted as invoices for mining equipment, computer equipment, address identification.)

Juridical Person:

  • Company Tax Information Register or "Registro de Información Fiscal" (RIF).
  • Authenticated or registered document to certify legal representation or power of attorney (in case the shareholder or owner of the company does not register).
  • Frontal photo of the attorney or legal representative.
  • Articles of Incorporation and Articles of Association of the company and their amendments.
  • Any other document requested by SUNACRIP. (May be interpreted as invoices for mining equipment, computer equipment, address identification.)

Following this procedure, after verifying the documents and the required information, SUNACRIP will digitally issue a RISEC number or code to identify the company or natural person that registered, which upon obtaining this identification will allow the user to operate and administer within Venezuelan territory everything related to the world of cryptoassets and its various related forms of exchange, operation and commercialization, Blockchain, Trading, Exchange, Digital Wallets; thus avoid the sanctions established in the Law of the Integral System of Cryptoactives.

That is why it is important that both companies and individuals comply with the indispensable and mandatory requirement of registration to obtain their RISEC number for the purpose it possesses and counts with a means or defense mechanism at the time that SUNACRIP performs an inspection or auditing and thus avoid being denied or revoked to perform any activity under this context, or in some cases be sanctioned, fined or confiscated improperly by SUNACRIP, since these attributions that this public entity has in relation to inspections and their possible sanctions are established in articles 34 and 37 of the Integral Cryptoactive System Law, given that article 34 constitutes the procedure to be followed (inspection or auditing) in case of non-compliance with the Law and/or the Providence, for example not having the registration with the SUNACRIP and obtaining the RISEC and Article 37 establishes the sanctions that can apply to natural or legal persons who are found in violation of the Law and / or Providence, which are transcribed below for further knowledge:

Article 34.- “The National Superintendence of Cryptoactives and Related Activities of Venezuela SUNACRIP, through the competent intendancy and making use of the most suitable technical means, shall inspect the activities of the cryptoactives sector, in order to determine the truth of the facts, which allow to know the conformity or non-compliance of the duties established by this Constituent Decree, those responsible, the degree of responsibility and, if applicable, the damage incurred".

First Paragraph.- It may rely on competent public authorities where there is a presumption that security, environmental protection, prices and public services may be affected".

Article 37.- “If during the inspection or inspection, the civil servant or official acting detects signs of non-compliance with the obligations established in this Constituent Decree, and there are elements that allow the presumption that serious harm or injuries of difficult reparation to the community may be caused; they may adopt and execute in the same act, preventive measures designed to prevent that the norms that regulate the matter continue to be broken, in accordance with the applicable legal system”.

Such measures may consist of:

  • Confiscation.
  • Suspension of Licenses, permits or authorizations issued by the National Superintendence of Cryptoactives and Related Activities (SUNACRIP).
  • Any other provision in the legal system to prevent the violation of the citizens' rights.

When the measure of confiscation of mining equipment is ordered, the Superintendency shall guard the respective assets, which, if the measure remains firm, may be disposed of for social purposes by means of a reasoned act to which the Superintendent shall subscribe for such purpose.

In this sense, and after observing what is stipulated in articles 34 and 37 of the Law, where it explicitly establishes sanctions for non-compliance with its provisions, it is recommended that any natural or legal person residing in Venezuela or abroad, who wishes to enter and/or is already entering the world of digital mining, both physically and in person, within the Venezuelan jurisdiction, its services, operation, blockchain and any other form of marketing and exchange of the same, may do so without any restriction or limitation, provided that the actions are appropriate and comply with the provisions of the Act, ie must meet the requirement to "register" with the National Superintendence of Cryptoactives (SUNACRIP) to obtain its RISEC.

It is also important to point out that this authorization or license indicated as RISEC is comprehensive, which means that the companies and natural persons that obtain it have the advantage to operate the virtual mining sector "in Venezuela", "for Venezuela" and "abroad", in a comprehensive and legal manner, since the same Law within the provisions does not establish restrictions for the user who acquires it, which could be interpreted as being able to operate, commercialize and exchange goods, services, stocks and any form of digital mining, as well as exercise Blockchain, Digital Wallets, Purchase and Sale of the different Cryptoactives, Exchange, Trading and any other related activity without any limitation.

In consequence and to culminate in base to these principles it is to indicate, that all those individuals as much natural as juridical that have the intention to exercise and to develop the commercialization, exchange of goods and services, to practice the digital mining and its operation, Blockchain, Digital Wallets, Purchase and Sale of the different Cryptoactives, Exchange, Trading and any other related activity and similar that is domiciled in Venezuela must register with the National Superintendence of CrIptoactives to obtain its RISEC license and thus will be authorized to operate this large sector from and for the national territory and even abroad; and also legal persons domiciled outside the national territory (foreign) who have or are going to have any type of electronic devices, computing or digital mining and any personnel and/or representative who want to operate and provide their services within the Venezuelan territory on any activity related to the purchase and sale of Cryptoactive and its various marketing activities, operation and exchange of goods, securities and services, Blockchain, Digital Wallets, Exchange, Trading and any other related and related activity, must go to SUNACRIP to notify its intention and purpose, since otherwise by not making the registration, may be subject to the sanctions established in the regulation.

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