Orlen's $424 Million Tether Debacle Exposed in Venezuela Oil Deal

Polish state energy firm Orlen has lost an estimated $378 million to $424 million in a failed cryptocurrency deal for Venezuelan crude oil. The scheme, which began in late 2023, involved buying discounted Merey 16 crude using tether (USDT), a dollar-pegged stablecoin.

The plan started with a meeting between Samer Awad, then head of Orlen Trading Switzerland, and Kam Ho 'Alex' Tse, founder of Dubai-based trading firm Hannon International, in Abu Dhabi in November 2023. At the time, the United States had temporarily eased sanctions on Venezuela's energy sector, allowing for a short window to purchase heavy Merey 16 crude at a discount.

Orlen Trading Switzerland sent an uncollateralized $230 million advance to Hannon International within days of signing a contract for 6 million barrels of crude. The conversion process from US dollars to USDT was costly, with one transaction alone costing $400,000 in fees to obtain 80 million USDT.

After the funds were converted into digital tokens, they were physically handed over on USB flash drives to Venezuelan brokers connected to PDVSA in Caracas. However, communication with the brokers stopped after the transfers, and PDVSA was unable to release most of the promised oil. Only one ship was loaded, carrying about 500,000 barrels of fuel oil worth $28.8 million.

Orlen canceled the contract in March 2024, and Polish authorities estimate the total losses at between $378 million and $424 million. Three former Orlen Trading Switzerland executives face up to 25 years in prison on criminal charges related to the deal.