Polish State Energy Company Lost $230 Million in Failed Venezuelan Oil Deal Using USDT

Poland’s state-backed energy company Orlen lost $230 million in a failed attempt to purchase Venezuelan oil after much of the payment was transferred in USDT through intermediaries, according to an investigation by the Financial Times.

The transaction, arranged in late 2023 through Orlen Trading Switzerland (OTS), involved a $345 million agreement to purchase about 6 million barrels of Venezuela’s Merey 16 crude. OTS paid two-thirds of the contract value, or $230 million, within Coin Bureau days of signing the agreement, but the expected crude shipments largely failed to materialize.

USDT Payments Moved Through Intermediaries in Caracas

The Financial Times reported that the deal was brokered by Hannon International, a Dubai-based trading company founded by Kam Ho “Alex” Tse about two and a half years earlier. The transaction was reportedly discussed during a gathering aboard a boat off Abu Dhabi before the formal contract was signed.

USDT was used for substantial portions of the payments amid restrictions surrounding Venezuelan oil transactions. According to the FT investigation, cryptocurrency access was transferred using USB sticks during meetings at hotels and restaurants in Caracas.

One payment involved a USB stick containing access to 60 million USDT, followed by another transfer involving 50 million USDT. Further payments were subsequently made to other intermediaries as attempts to secure Venezuelan oil continued.

The arrangement produced little crude. One Orlen-chartered vessel eventually loaded about 500,000 barrels of fuel oil, valued at $28.8 million, while the original heavy-crude contract remained unfulfilled. Orlen terminated the agreement on March 28, 2024, after shipping and other costs had accumulated.

Orlen Faces $424 Million Loss From Failed Transaction

The consequences extended well beyond the initial cryptocurrency payment. The Polish government estimated that Orlen’s total losses connected to the transactions reached PLN1.6 billion, or about $424 million, including shipping, legal and other costs attributed to mismanagement.

The case also illustrates the operational risks that can emerge when cryptocurrency is used in cross-border commodity transactions involving sanctioned or heavily restricted markets. While stablecoins can facilitate transfers outside traditional banking channels, their use does not eliminate underlying contractual, counterparty, sanctions and compliance risks.

More than two years after the original transaction, Orlen is still seeking to recover the $230 million advanced to Hannon. The dispute is in arbitration, while Hannon has said it does not have funds anywhere near the amount required to repay Orlen. Three former OTS executives have also faced criminal charges in Poland over the affair.

The unresolved arbitration and criminal markets proceedings will determine how much of the money can ultimately be recovered and how responsibility for the failed transaction is allocated.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.