Poland's Orlen lost $230M in failed Venezuelan oil deal using crypto

Poland's state-controlled energy company Orlen advanced approximately $230 million to a Dubai-based intermediary for Venezuelan crude oil that largely never arrived, with a significant portion of the funds converted into the cryptocurrency Tether (USDT) and moved through a network of brokers. The failed transaction has become a major financial scandal and criminal case in Poland. The deal was initiated in late 2023 by Orlen Trading Switzerland (OTS), a subsidiary of the Polish refiner, which agreed to purchase roughly 6 million barrels of Venezuelan Merey 16 crude from state-owned PDVSA. The contract required a two-thirds advance payment. In December 2023, OTS wired $230 million to Hannon International Middle East DMCC, a Dubai-based trading company, to facilitate the purchase. The transaction occurred during a temporary easing of U.S. sanctions on Venezuelan oil, which allowed certain transactions to proceed. However, Venezuela's state oil company, PDVSA, had increasingly demanded advance payments in USDT due to restrictions on conventional banking channels. Hannon therefore converted much of the advance into the stablecoin before attempting to secure the crude.