Poland's state-controlled energy company Orlen lost up to $424 million following a late 2023 scheme to purchase Venezuelan crude oil using cryptocurrency, marking one of the largest corporate scandals in the nation's history.
The Transaction Structure
In November 2023, Orlen Trading Switzerland met with representatives from Dubai-based trading firm Hannon International to arrange purchases of discounted Merey 16 crude oil. The U.S. government had temporarily eased sanctions on Venezuela's energy sector at the time, creating a window for the transaction.
Within days of signing a contract for 6 million barrels, Orlen wired a $230 million advance payment to Hannon International. The company was tasked with converting the funds into Tether (USDT), a dollar-pegged stablecoin, to secure cargo allocations from Venezuelan state oil company PDVSA, which had limited access to Western banking networks.
The Cryptocurrency Transfer and Loss
Hannon enlisted Dubai intermediaries and Venezuelan brokers to convert the dollars into digital tokens. According to court records and blockchain analysis, the conversions incurred significant losses. An initial batch yielded 80 million USDT after paying $400,000 in fees, while an additional $135 million sent to another intermediary produced only 85 million USDT, leaving a $50 million shortfall.
Between January and March 2024, private cryptocurrency keys controlling the digital assets were transferred on USB flash drives in restaurants and hotel rooms in Caracas, Venezuela. After the transfers, contact with Venezuelan brokers was lost and PDVSA could not release the oil cargoes. Only one vessel was ultimately loaded with approximately 500,000 barrels of fuel oil worth $28.8 million.
Financial Impact and Legal Consequences
Accounting for lost prepayments, ship chartering fees, legal expenses, and accrued liabilities, Polish authorities estimate Orlen's total losses at between $378 million and $424 million. Orlen officially canceled the contract in March 2024.
Polish prosecutors opened criminal investigations into Orlen Trading Switzerland management, resulting in formal indictments against three former senior executives with potential prison sentences of up to 25 years. Polish Prime Minister Donald Tusk publicly condemned the operation as a "disgrace in front of the entire world."
Orlen's new management team has disavowed the transaction and launched international arbitration proceedings in Dubai to recover the $230 million advance payment. Hannon International maintains that it acted in good faith and denies liability for the loss of the digital assets.
