The use of Tether’s stablecoin, USDT, has come under scrutiny in connection with a failed oil trade between Poland’s largest energy company and Venezuela, resulting in a $230 million loss for the Polish firm in late 2023. The deal involved Orlen Trading Switzerland (OTS), a subsidiary of state-run energy giant Orlen, in its efforts to acquire 6 million barrels of crude oil from Venezuela’s state oil company, PDVSA.
PDVSA turns to stablecoins to circumvent sanctions
As US financial sanctions made dollar transactions increasingly difficult for PDVSA, the Caracas-based company began requesting that buyers make partial payments using USDT. Tether’s USDT is the most widely used stablecoin worldwide, designed to maintain parity with the US dollar and offer a digital alternative for cross-border transactions.
Orlen agreed to these terms, advancing $230 million largely in USDT in November 2023 through an intermediated transaction structure. The payment was sent to Hannon International Middle East, a Dubai-based trading firm engaged at Orlen’s request. Hannon’s role was to obtain the necessary USDT and facilitate the oil purchase from PDVSA.
Mini dictionary: Orlen is Poland’s dominant, state-owned oil and energy conglomerate, involved in refining, petrochemical production, and fuel distribution across Europe.
Funds vanish through crypto intermediaries
Despite the advance payment, most of the funds vanished as they passed through multiple crypto brokers and intermediaries in Dubai and Venezuela. According to David McCoy, managing partner at ADG Legal Abu Dhabi and Hannon’s legal representative, “Hannon became involved in the transaction at Orlen’s request and was not responsible for the transaction’s failure.”
Hannon, engaged by Orlen to facilitate the transaction, maintains it only executed the client’s instructions and denies responsibility for the lost funds or the contract’s breakdown.
Hannon initially obtained $80 million in USDT after sending $230 million to a Dubai financial services company, reportedly paying a $400,000 commission. It later transferred an additional $135 million to Dubai-based Horizon Global but claimed to receive only $85 million in USDT, with Horizon contesting these accusations.
| Recipient | Amount Sent | USDT Received | Difference |
|---|---|---|---|
| Dubai Financial Services Company | $80 million | $80 million | $0 |
| Horizon Global | $135 million | $85 million | $50 million |
| Gold Mar Int. Trading | $30 million | $21 million (recovered) | $9 million |
Hannon also sent $30 million to Gold Mar International Trading for USDT conversion, but later recovered only $21 million in February 2024. In January 2024, two USB sticks holding USDT worth $60 million and $50 million were delivered by Hannon employees to a broker in Caracas. A second broker reportedly received access to $11 million in USDT the following month.
Despite these efforts, Orlen’s ship was only loaded with about 500,000 barrels of fuel oil, valued at $28.8 million, on March 8. The contract was officially terminated by Orlen Trading Services on March 28, having received only a fraction of the oil it had paid for.
Polish authorities launch investigation
On January 2025, the Warsaw Regional Prosecutor’s Office opened an investigation into the oil contract, assessing the total damages for Orlen Trading Services at 1.5 billion Polish zloty (around $378 million). McCoy, representing Hannon, stated his client is not involved in the Polish investigation and declined further comment.
The failed contract has drawn further attention to the risks of using cryptocurrency as a workaround in high-value, cross-border trade, especially in regions affected by international sanctions.
