Poland’s government-controlled energy company Orlen suffered an estimated loss between $378 million and $424 million after a cryptocurrency-fueled attempt to secure Venezuelan crude oil collapsed.
Oil purchase through crypto payment
The transaction began in late 2023, shortly after the United States eased some sanctions on Venezuela’s oil sector. This move briefly opened the door for international buyers to access discounted Venezuelan Merey 16 crude.
Orlen Trading Switzerland, a subsidiary of Orlen, sought to take advantage of this opportunity. Its then-head, Samer Awad, initiated a purchase by meeting Kam Ho “Alex” Tse, founder of the Dubai-based Hannon International, in Abu Dhabi in November 2023.
Due to persistent restrictions on Venezuela’s state oil company PDVSA, Orlen could not use standard financial channels. Instead, PDVSA required prepayment in USDT, a major dollar-pegged stablecoin, instead of traditional bank transfers.
Orlen Trading Switzerland subsequently wired $230 million in uncollateralized funds to Hannon International as an advance for an intended shipment of 6 million barrels of crude.
Although the written agreement did not explicitly mention cryptocurrency, Hannon International was tasked with converting the cash into USDT and facilitating the deal with PDVSA via local intermediaries and brokers in Dubai and Venezuela.
Blockchain records and court filings reveal that these currency conversions incurred heavy costs. In one instance, $400,000 in fees were paid to acquire 80 million USDT. In another, $135 million produced just 85 million USDT, resulting in a shortfall of about $50 million prior to any oil being shipped.
Mini dictionary: USDT (Tether) is a stablecoin cryptocurrency that aims to keep its value pegged to the US dollar. It is widely used in international trade where parties seek to avoid traditional banking restrictions.
Physical transfer and breakdown of communication
To complete the process, Hannon International sent representatives to Caracas. There, over a period of weeks in early 2024, private keys to wallets holding large quantities of USDT were physically delivered on USB drives to Venezuelan brokers linked to PDVSA.
The first handoff of a USB drive containing 60 million USDT reportedly took place on January 5, 2024, in a hotel room. The second, with 50 million USDT, followed on January 28. Additional drives transferring 22 million USDT changed hands between February and March.
After these exchanges, Orlen lost all contact with its Venezuelan partners. PDVSA — Venezuela’s state oil company — failed to fulfill most of the contracted shipments, delivering only a single vessel with approximately 500,000 barrels of fuel oil valued at $28.8 million.
Orlen canceled the contract in March 2024 amid mounting losses that included not only lost payments but substantial shipping and legal expenses.
Investigations and legal fallout
Polish Prime Minister Donald Tusk publicly condemned the agreement, describing it as a “disgrace in front of the entire world.”
Polish prosecutors formally charged three former Orlen Trading Switzerland executives over the debacle, with the possibility of prison sentences up to 25 years.
The utility’s new management launched international arbitration proceedings in Dubai to pursue reimbursement for the lost $230 million. Hannon International claimed it simply followed Orlen’s instructions and denied bearing any responsibility for the missing assets.
Orlen, which serves as Poland’s largest oil refiner and fuel retailer, continues to face scrutiny over its risk controls and due diligence in high-stakes international trade. The event has also fueled public concern about cross-border crypto payments and opaque trading structures.
