The beginning and end of petro: Venezuela in trouble

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Author: Nathaniel Popper, Ana Vanessa Herrero, The New York Times


Gabriel Jiménez

Photography: Evan Jenkins, The New York Times

On a Tuesday in early 2018, just after midnight, the Vice President of Venezuela expropriated national television broadcasts. Even though the night was getting dark, he was still wearing a blue suit and a red tie, with a calm expression. He announced that the Venezuelan government is about to make history and become the first country in the world to create and sell cryptocurrency, which will be called “petrocoin.”

Three blocks away, in the spacious vice president’s office, Gabriel Jiménez is sitting sleepily at a glass conference table, his fingers tapping on the computer keyboard, and the air conditioner above his head is constantly delivering cold air. Jiménez is tall and thin, with big black glasses nested between his sloppy beard and the back hairline. He spent several months designing and coding every detail of petro coins. Now, he and his chief programmer are racing against the clock to put the petro into use as soon as possible, although some basic issues of petro have not yet been finalized. 

Just after the vice president finished the broadcast, his chief of staff angrily broke into the office. Jiménez couldn’t understand his annoyance—what kind of typo on the website, the shame of the country, etc. The chief of staff, with two guards equipped with military rifles, told Jiménez and his programmers that they were banned. If they try to contact the outside world, they will be sent to the Helix Building. This unfinished building is a symbol of Venezuela’s terror: it was once a shopping mall project with a futuristic appearance and a car ramp between the shops. Now it has been transformed into a prison for political prisoners and a torture cell.  


Spiral building political prison. Mr. Jiménez recalled that he was told once: “If you do not hand over the documents, I do not guarantee that nothing will happen to you next.”

Photography: Adriana Loureiro Fernandez, The New York Times

 Jiménez hid his phone under the table and secretly texted his wife. Although she had left him recently, Jiménez asked her to give him a hug and told his father that he was in trouble.

Before sunrise, Jiménez was finally released. After returning to the apartment, he burst into tears. Before he calmed down, he received a call. Nicolás Maduro, the President of Venezuela himself, asked Jiménez to come and see him. Jiménez walked to the presidential palace and walked through the crowd outside with exhaustion and fear.

A few months ago, Jiménez would not have thought that later he would be summoned by the Venezuelan dictator. Jiménez, who was only 27 years old at the time, ran a small start-up company, and has been protesting against the dictator for many years because Maduro not only mismanaged the country and plunged Venezuela into a financial crisis, but also detained, tortured and killed those who challenged his power.

But how much Jiménez hates this regime, how much he believes in the potential of cryptocurrency. When the Maduro government proposed to him to create a Crypto currency, Jiménez saw an opportunity to change the country from the inside out. Jiménez believes that if Venezuela’s cryptocurrency is made, he can not only give the government what they want-hyperinflation measures, but also quietly introduce technology to allow Venezuelans to change from a government that dominates every detail of daily life. To gain a certain degree of freedom.

His friends and family warned him that cooperating with the Maduro regime will not end well. Tareck El Aissami, the vice president responsible for overseeing this work, was called a “drug lord” by the US government, and the federal government put him on the wanted list. Jiménez acknowledged the danger of this work, but he said that petrocoin is a Trojan horse that will sneak into the dictatorship and help him and the opposition achieve reforms.

2017 and 2018 were full of drama for everyone in the crypto world. The price of Bitcoin soared by more than a thousand percentage points, then fell off a cliff, and billions of dollars of wealth gathered and dispersed. But perhaps no one has gone through such a dangerous journey like Jiménez. His belief in cryptocurrencies took him from obscurity to the center of the country’s dark power institutions. He talked directly with Maduro and his senior deputy, and the two often praised his ingenuity-at this time they had not yet intensified threatening Jiménez’s life and forcing him into exile.

“The actual goal of this project is to change the economic model of this high-pressure regime,” he told the New York Times recently. “This is my mission and my gamble. In this gamble, I eventually lost everything in my life. : My friend, my partner, my reputation, my love, my company and my country.” 


In 2017, President Maduro in Caracas

Image source: Office of the President of Venezuela

Jiménez was previously regarded as the creator of petro, but he never told the public about his experience. The formation of this report relied on hundreds of pages of confidential emails, text messages and government documents, as well as interviews with more than a dozen petrocoin project participants. Many people were interviewed anonymously because they are still living in Venezuela, where public criticism of the government could immediately lead to imprisonment and even death.

A desperate country

Jiménez was only 8 years old when the military dictator Hugo Chávez came to power in 1998, when he lived in the small city of El Tigre. Chávez used Venezuela’s abundant oil reserves to provide social services to the poor, but he also aroused the cult of him among the people, and Venezuela became more and more authoritarian.

Jiménez belongs to a well-educated class and is naturally attracted by the opposition. After attending college in Caracas, the capital of Venezuela, Jiménez spent a few years in the United States, where he studied, got married, and participated in activities against Chávez and his successor Maduro. He also interned under a Republican congresswoman from Miami who often criticized the Venezuelan regime. When the reformists won the Venezuelan parliamentary elections in 2015, Jiménez felt that he had to return to his country to participate in the political opening movement. 

Jiménez and his wife arrived in Caracas by plane in early 2016, and he immediately discovered that the country was in distress. The plunge in oil prices made Maduro crazy printing money, the Venezuelan currency, the Bolivar, became worthless, people were faced with a shortage of medicines, and tragedies of refugees drowning and children starving.

Jiménez lives relatively well. He founded a start-up company called “The Social Us” to introduce Venezuelan programmers and designers to American companies looking for cheap labor. Like many wealthier Venezuelans, Jiménez almost all his money is in U.S. dollars, but in this way, spending money becomes troublesome. He has to exchange foreign currency illegally every few days, and he takes a taxi in Venezuela. If he wants to pay the bolivar, he has to prepare a thick stack of banknotes, so most drivers only accept wire transfers.

This situation has rekindled Jiménez’s long-standing interest in cryptocurrencies. He began to use Crypto currency to pay his employees; even if the crypto market is volatile, it is more stable than Venezuelan bank accounts and is not controlled by the Maduro regime. The staff of The Social Us began to promote that Venezuelans can use cryptocurrency to conduct actual transactions, and in fact, more and more Venezuelans are buying Bitcoin on the street. One of their company’s projects is a payment terminal that avoids government spending restrictions. 

Initially, the Maduro regime believed that Bitcoin was a threat. After all, it used a decentralized network to create and move currency, and it was not responsible for the authorities. But later some government members noticed that cryptocurrency has two sides, and it can also help Venezuela avoid sanctions imposed by the United States and international organizations.

In September 2017, an official loyal to Maduro proposed the creation of a Crypto currency backed by Venezuelan oil reserves. This is unreasonable, because one of the principles of Bitcoin is that its value is not derived from natural resources or government legal currency, but from mathematical laws. But in the face of desperate Venezuela, this distinction is no longer an obstacle. Government official Carlos Vargas learned about Jiménez’s work in a local publication and asked to meet him. 

Soon, the tall figure of Vargas appeared in The Social Us office. Vargas ate a whole bag of potato chips and praised the group of young programmers, saying that only they can create the currency he proposed in Venezuela. This is exactly what Jiménez wanted to hear. Their goal is to create a new Venezuelan currency that can circulate freely on an open network like Bitcoin, and the government cannot control or destroy it. Vargas wanted to call it an oil global currency, but Jiménez suggested a simpler name: oil currency.

The Social Us prepared a short promotion plan for the petrocoin project. But Venezuela has no shortage of people who propose crazy plans, so Jiménez is not too concerned about this. However, in early December, when Jiménez was attending a conference in Colombia, he received an urgent text message: Maduro had just announced a national cryptocurrency called petro. Mr. Jiménez turned on his laptop and saw a video: The president was wearing his usual work shirt and said to the cheering crowd: “This is a big event.”

Jiménez immediately sent Vargas a message: “Did they steal our project?”

Vargas replied: “This is our project. The approval has just been passed. You have to come back soon.” 

Mr. President flapping the air conditioner

Jiménez landed in Caracas in the middle of the night, and soon spoke to some government officials. Vice President El Aissami spoke on the phone. Although the vice president is known as the “second brutal man in Venezuela,” when he started asking Jiménez questions, a strange reversal of power seemed to happen. 

The vice president is very friendly and curious, and said that this is Jiménez’s project and they are just learning from him. Mr. El Aissami wants to know how many petrocoins there will be, and whether new petrocoins can be mined like Bitcoin. Jiménez thought to himself that these officials did not have a particularly clear understanding of how cryptocurrency works. 

After the call, Jiménez sent an email to his employees, asking them to come to the office for a meeting early. He gathered everyone together, and then stood at his desk and said that they should abandon all other projects and focus on the development of petro coins. He said that employees can choose to leave, but if they do this well, it will be a once-in-a-lifetime opportunity to change Venezuela. “We will free the people from government control.” He said.

An employee of Jiménez said he could not work for a dictator and resigned on the spot. Outside, the creation of a state-backed cryptocurrency-this argument is almost contradictory-has become a laughing stock in the crypto circle, where people have always believed that their technology is designed to avoid interference in state power. After the meeting, Jiménez’s closest friend and creative director Daniel Certain pulled him off the table, and the two sat on the lazy couch around the office and chatted. 

“Don’t do this, it’s not a good job,” Certain told him, “You want us to work for them, but they find that you are useless, and they will take the project away.”

According to Certain recalls, Jiménez showed his characteristic arrogance on his face and said with a smile: “In Venezuela, no one else knows how to do this.”

Other friends tried to dissuade Jiménez, but he received royal treatment in all his dealings with the government. He said that every cryptocurrency has a basic document as a basis, that is, a white paper. They should submit a petro currency white paper to the central bank. This move will have very important symbolic significance. A minister agreed to his request. He also advocated that all preparations should be completed within one month, so that no one can guess the next step of the project, and the government agreed.

Jiménez chose to develop petrocoins based on Ethereum so that it can be traded on a free and open market, which is always prohibited by the Venezuelan government. However, no one from the government seems to have doubts about this, and no one is even aware of the problems in the trading market.

As the government promised, at the end of December, at an all-day meeting of the central bank, Jiménez proposed his petro currency plan. The participants also included several US crypto experts. When Vargas-the newly appointed Director of Crypto Assets in Venezuela-took the stage to speak, he seemed to have accepted Jiménez’s deviant ideas. “Our theme is that we want to switch to a new economic system.” Vargas said. 

But the real conversation happened after the meeting. Vargas told Jiménez and the Americans at the meeting that the president himself wanted to meet them.

It was one night, and a van drove them through heavily armed roadblocks to the military base, where the president’s private residence was located. They did not expect the presidential residence to be so simple. An old Chevrolet Camaro is parked in the yard, next to the car is a children’s trampoline.

Maduro is dressed casually, sitting on the sofa with his wife, beside other senior officials. He shook hands with everyone and talked to them in broken English. He also praised Nick Spanos, an American visitor, and said that his recent appearance in a Bitcoin documentary was very exciting. The dictator said that he and his wife just now Watched this documentary on Netflix.

The air conditioner above the door hummed. The president asked the vice president if he would fix the air conditioner at this time. Then, the president in Adidas sportswear stood on the sofa and patted the air conditioner. Given the lack of supplies in Venezuela, Jiménez was a little relieved to see that the president’s life was not luxurious.

Maduro smiled and told everyone that his announcement of the issuance of petrocoins inspired cryptocurrency investors everywhere and pushed Bitcoin to a historical high of $20,000. Everyone didn’t know if he made a joke, and everyone laughed in agreement.

When the president asked Jiménez to speak, Jiménez introduced the basic plan of petro, including the first issuance of petro currency worth 200 million US dollars. Then the Minister of Finance spoke up. This was the first time anyone questioned Jiménez’s plan. The minister took out a Manila paper folder with a map of the Orinoco heavy oil belt. He said that he hoped that the petrocoin project would receive continued support from certain oil reserves there, which are worth billions of dollars. , Is several times that of petro coins.

Jiménez retorted that it is one thing to link the initial price of petrocoins to oil, but if it cannot be traded freely afterwards and buy and sell at a price that investors think is appropriate, then it is not a revolutionary product. If the price of petro currency always reflects oil reserves, then it is essentially a bond, and recent sanctions have prevented Americans from legally buying such bonds.

The president does not seem to listen to this debate so seriously. When the meeting ended, Spanos felt that Jiménez’s future was not so good. “I think he will become a scapegoat,” he said later, “I don’t think I will see this young man again.”

Spanos still remembers what he said to Jiménez before leaving Caracas: “I wish I had a magic carpet to take you away from here.” 


Caracas, cars driving under petro billboards

Photography: Adriana Loureiro Fernandez, The New York Times

“You can’t refute what the president said”

Maduro stepped up its petro-coin promotional activities. He didn’t have many other tactics to fight against hyperinflation, and hyperinflation lost 90% of Bolivar’s value in just four months. Members of the opposition publicly called for a coup.  

Jiménez watched Maduro’s televised speech, and he was surprised because the president understood most of what he said in the presidential residence. Maduro mentioned Ethereum, white papers and transparency. 

But the president’s speech also made Jiménez understand that he no longer controls the petro project. Maduro announced that the currency will in fact be linked to a specific area of ​​the Orinoco heavy oil belt, which is what Jiménez is opposed to. He complained to Vargas, but was refuted: “You can’t refute what the president said.” Vargas asked Jiménez to rewrite the petro white paper as soon as possible, reflecting Maduro’s decision on the white paper. He and the vice president are about to travel to Turkey and Qatar to begin selling petrocoins to investors.

Things get worse and worse soon. The president’s excitement made everyone want to get a share of the petro. In mid-January 2018, the Ministry of Finance held a series of meetings, but in the end it turned into a controversy. The chief economic adviser of the Ministry of Finance hopes that the petro currency has a stable value and is controlled by the government, so that it can choose to exchange it for real oil. Jiménez fought hard on reason and was able to conclude an agreement that the price of oil can be used as the lowest value for the country to accept petrol, but the price of petro can also fluctuate in the open market. He also ensured that petrocoins will exist on an open computer network and connected to Ethereum, which will fundamentally limit the government’s power to intervene.

But in the end, Jiménez was convinced that he would lose control. He said that when he refused to share a Crypto copy of the white paper, the minister threatened him on the phone: “You must understand that petro is now a national project. If you don’t hand over the documents, I don’t guarantee that nothing will happen to you next. thing.”

Some employees of The Social Us worry that Jiménez’s obsession with launching petrocoins puts them all in crisis. In another confrontation between Vargas and Jiménez, Vargas showed him some blue folders containing information files of The Social Us employees; and after another dispute (one of the reasons for the dispute was The Social Us Company He hasn’t received any payment yet), the vice president sent a message to Jiménez that he now thinks Jiménez is a traitor.

At this time, it is not surprising if Jiménez will face jail, and he is no longer needed for the petro project. However, Jiménez was pulled back to the project team in a series of chaotic events. The government told his team that they need to compete with an unknown Russian group to participate in the issuance of petrocoins. The employees of Jiménez found that the group did not have any experience in important cryptocurrency projects. “Time” magazine later put forward a speculation: Behind this group is the Kremlin, which intends to control the petro currency. 

No matter what matters, Russians stand by and watch any job. Jiménez and his company have to deal with almost everything until the petro coin issuance date approaches on February 20, 2018. In this way, Jiménez knocked out codes all night under the surveillance of armed guards, and was summoned to the Presidential Palace early the next morning.  


Presidential Palace of Venezuela, Miraflores Palace

Photography: Adriana Loureiro Fernandez, The New York Times

“I don’t know who my enemy is”

Entering Miraflores Palace, Jiménez was taken to the largest auditorium, where all the cabinet members and Maduro were waiting for him. The president greeted him warmly, motioned him to sit on the chair next to him, and asked him how he had been since he left the presidential residence. Jiménez realized that there were other people in the auditorium and cameras facing them, so he didn’t mention the night before, nor did he mention other interesting things. He only emphasized that his team has completed the final petro coin. Released version.

“I don’t know who is my enemy in the auditorium,” he later recalled the scene, “I’m just a guy with no power.”

After some small talk, the president led everyone into a hall, which was transformed into a petro-themed TV studio. Under the gaze of a group of people, a ceremony officer put the Russians on stage, and then made Jiménez walk on the stage. Jiménez has a pen and a contract in front of him. This contract is the agreement he has refused to sign for several weeks. Once signed, he can only act as a petro-coin sales agent-this is not for him. Obedient” punishment. As the live TV broadcast is ongoing, Jiménez is in a dilemma. He scribbled his signature, and forced a smile under the spotlight.

After Jiménez sat down, thinking about what he had just done, he still felt dazed. The President said that Venezuela has raised US$725 million from investors. He named and thanked Jiménez and The Social Us. “This company was founded and run by a group of talented young people in Venezuela,” the president praised them. “You have to keep this energy.”

The petro project never really started. On March 19, Trump signed an executive order banning Americans from using petrol. On the same day, the Associated Press published an article about Jiménez, which pointed out that, a few years before helping Maduro to create a petro coin, he had interned under an anti-Maduro member of the House of Representatives. Congressman Ileana Ros-Lehtinen immediately wrote to request the Ministry of Finance to investigate “whether Venezuelan national Gabriel Jiménez meets the sanctions standards of the relevant authorities.”

In Caracas, Jiménez received double criticism from the left and the right. The Social Us found that they would never receive any other business. In July, a lawyer submitted a 68-page document to the National Constituent Assembly requesting that Jiménez be investigated for treason.

Jiménez hid in his apartment, and when he could no longer pay the rent, he hid in his mother’s apartment. Friends said that they rarely see him. Finally, his ex-wife convinced him that he should leave Venezuela first before the authorities have finally decided to arrest him.

In April 2019, he sold his 2007 Toyota Autana and bought a ticket to the United States. After arriving in the United States, he moved to his father. His father was about to start a three-year prison life, charged with participating in a money laundering project of a Caribbean bank.


Gabriel Jiménez was taken in Chicago. He now lives in Oakland, waiting for the US government to approve his asylum application

Photography: Evan Jenkins, The New York Times

Jiménez is now collating the asylum application materials every day. He wrote in the application materials: “As the founder of petro, my special status makes me subject to persecution by the Venezuelan government because they want me to remain silent.” 

After his father reported to prison, Jiménez stayed alone at a friend’s house. He slept in the children’s room with Lego and dinosaurs at the foot of the bed. Because he has no political asylum status, he cannot work, so he can only sit idle in his apartment and play mobile games, and he can only close the blinds and heat it all day long to save electricity costs for turning on the air conditioner.

Last fall, he said in a long interview: “I am not joking: I am in a state of severe depression.”

It is incredible that some countries have begun to follow the example of Venezuela, saying that they will launch a Crypto currency initiated by their own government. China took the lead first, and the European Central Bank stated that they are also moving in this direction. Venezuela has restarted petrocoins many times, and finally launched a Crypto currency used to issue pensions, which has nothing to do with the open Crypto currency originally envisioned by Jiménez.

In October, Jiménez heard that he had obtained a work permit in the United States. He cried with joy, and then started a new project: to develop a cryptocurrency so that Venezuelans do not need to use bolivars.

Jiménez is still almost penniless, but an encryption technology startup in the San Francisco Bay Area allows him to work outside the office, eat food in their refrigerator, and sleep on the couch in the CEO’s apartment. Recently, a reporter from The New York Times met with him at a restaurant near the company. He took out a black notebook with a letter of apology to his lost friend.

“I always thought that I could find a way to make up for my mistakes,” Jiménez once wrote to one of his best friends. “I know that apologies are not enough. I know I deserve to be so painful, but believe me, life makes me The pain I have endured has made me miserable.”

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