Original Title: How a Silicon Valley Startup Became a Crypto Lifeline for Venezuela
Original Author: Ben Foldy, The Wall Street Journal
Original Translation: Luffy, Foresight News
The founder of the fintech startup Kontigo embraced the Silicon Valley strategy: moving the company into a residential building in San Francisco, hosting hackathons suitable for TikTok dissemination; using buzzwords during roadshows, claiming to create a "new bank for Latin America"; and even boasting about pioneering the Mars economy.
This approach allowed the small, flamboyant crypto startup to successfully join the top incubator Y Combinator and raise over $20 million from well-known Silicon Valley investors like Coinbase Ventures last December.
However, recent U.S. military actions in Venezuela have brought a controversial aspect of Kontigo's business into the spotlight: it has become an important channel for funds to enter and exit the heavily sanctioned Venezuelan economy.
Now, Kontigo is facing service interruptions from banks and payment networks, including JPMorgan Chase, Stripe, and Bridge, while also dealing with allegations of undisclosed ties to the ousted Maduro regime, which Kontigo denies.
A Kontigo spokesperson declined to answer questions about business details but stated in a statement that the company is reviewing its operational model.
"Kontigo is committed to expanding financial coverage for underserved communities," the spokesperson said. "We are conducting an internal review and will announce progress at the appropriate time. We adhere to U.S. laws, including those related to sanctions, and are evaluating our existing compliance processes and mechanisms, which will be improved as necessary."
Kontigo was co-founded in 2023 by Venezuelan Jesus Castillo, who has portrayed himself as a "David" about to defeat mainstream banking giants. The company claims that its 1.2 million users in Latin America and South America have completed over $1 billion in fund transfers through the platform. The app allows users to exchange hard currency for stablecoins pegged to the dollar, enabling payments and access to the traditional banking system.
Outside of Venezuela, the image the company presents to investors is that of a platform helping ordinary Latin Americans facing hyperinflation. However, within Venezuela, it has become a channel to circumvent U.S. sanctions aimed at cutting off the Maduro regime's key sectors from the international financial system.
According to a presentation at a December event in Caracas for invited partners, an economist invited by Kontigo explained how the company's technology helps the Maduro regime evade U.S. sanctions on the country's oil exports and repatriate oil sales revenue in cryptocurrency back to the domestic economy.
As sanctions cut off Venezuela's traditional financial channels, the government has increasingly relied on stablecoins for oil sales. The economist demonstrated that in the second half of last year, nearly 80% of the country's oil revenue was received in stablecoin payments. These funds were then exchanged for bolivars through banks, informal trading desks, and government-authorized crypto trading platforms like Kontigo.
One slide read: "The crypto market comes to the rescue."
For months, Kontigo provided users with the ability to transfer funds between JPMorgan Chase accounts through intermediaries, most of which were prohibited by sanctions.
At the end of last year, JPMorgan suddenly took steps to cut off these channels. According to insiders, Stripe, which had processed payments and transactions for Kontigo, also terminated its partnership with the company.
Insiders said that when Kontigo reached an agreement with another U.S. partner financial institution, company executives told the counterpart that it had no actual operations within Venezuela. That partner has since taken steps to terminate its relationship with Kontigo.
In the context of U.S. sanctions, Venezuela turns to stablecoins for oil sales
U.S. Home: A High-Profile Startup
Castillo co-founded Kontigo with the intention of using blockchain technology to solve Venezuela's daily financial dilemmas, where hyperinflation and a lack of credit make it difficult for people to preserve their savings. The platform allows users to exchange bolivars for stablecoins pegged to the dollar, which are more stable.
To U.S. investors, Castillo packaged his startup as a team of immigrants with grand dreams working hard to succeed. Early investors stated they were attracted by the vision of helping those in real need.
In promotional materials, the company claimed that Castillo and his colleagues took turns driving Uber at night to make ends meet while building the company, aiming to create a financial system suitable for a "multi-planet affluent era" and avoid "exporting Earth's currency and economic failures to Mars."
By mid-2025, according to a promotional video released on LinkedIn, Kontigo began offering users free "virtual" U.S. bank accounts through JPMorgan Chase. Insiders said these accounts were provided through another fintech startup, Checkbook, and that JPMorgan had no direct banking relationship with Kontigo. Nevertheless, Kontigo still used the Chase brand logo in its advertisements.
In December of last year, just weeks before the U.S. raid to overthrow the Maduro regime, Kontigo announced it had completed a $20 million funding round, with investors including Coinbase Ventures, Alumni Ventures, and DST Capital. Coinbase, Alumni, and DST did not respond to requests for comment.
After the funding was completed, Castillo posted a video on LinkedIn boasting about his "23 million dollar" Silicon Valley mansion, where he and his seven-person team would live, undisturbed, with the goal of increasing annual revenue to $100 million within 60 days.
"If you are not willing to move the entire team to San Francisco and lock yourselves in a house until the goal is achieved, then you are not serious enough; you do not desire success as much as we do, and you are destined to fail," Castillo stated.
According to a promotional video, this funding coincided with a rebranding of the company's services, with Kontigo claiming it could allow any user worldwide to buy and sell dollar-pegged cryptocurrencies without providing identification documents.
"Jamie Dimon, we are coming for you," Castillo wrote on LinkedIn, addressing the CEO of JPMorgan Chase, and once again boasting about creating "the largest bank in the world."
A large screen displaying the Kontigo cryptocurrency app interface, showing a balance of $5,000 and transaction records
Within Venezuela: A Different Narrative
In Venezuela, Kontigo operates under a license issued by the country's cryptocurrency regulator, Sunacrip, obtaining government permission to conduct crypto business. This license was granted to a Venezuelan company named Oha Technology, signed by the Venezuelan Minister of Finance.
Kontigo then seemed to try to distance itself from Oha, claiming it collaborates with local institutions in all markets. However, until recently, Kontigo's official website still displayed its operating license issued by Sunacrip and listed Oha as its subsidiary in Venezuela. Castillo's personal webpage shows that he previously served as the Chief Operating Officer of Oha AI. In private chat messages seen by The Wall Street Journal, Castillo celebrated obtaining the Sunacrip license in January 2025 and shared the license documents.
At the invitation-only presentation in Caracas, a company spokesperson emphasized the increasingly important role of cryptocurrency in the Venezuelan economy. Economist Asdrúbal Oliveros told the audience that revenue from sanctioned oil sales is received in stablecoins, which then flows into licensed crypto platforms like Kontigo and its competitor Crixto.
Venezuelan Kontigo users can use the app to transfer funds to their Venezuelan bank accounts, even if those banks are under U.S. Treasury sanctions.
Turning Point
Just weeks after announcing the successful funding, Kontigo's situation began to take a sharp turn for the worse.
At the end of December, an article by The Information revealed that Kontigo had been cut off from services by JPMorgan Chase.
Days later, U.S. military actions overthrew President Maduro. Shortly thereafter, influential independent fintech journalist Jason Mikula wrote about the company, accusing Kontigo of having secret ties to one of Maduro's sons.
Kontigo quickly launched a counterattack.
When Klarna CEO Sebastian Siemiatkowski shared Mikula's article on X platform, Kontigo's official account replied that the company "will hold accountable those spreading these falsehoods, as they harm the company's commercial reputation."
Subsequently, Kontigo informed users that the platform had been hacked, resulting in a total loss of approximately $341,000 for 1,005 users. The company stated it had fully compensated users for their losses.
In a 9-minute video posted on social media on January 12, Castillo stated in Spanish that the platform was simultaneously under attack from hackers and critics, denying any ties between Kontigo and the Maduro regime.
"The fact is, Kontigo's success is the result of years of hard work, resilience, and perseverance; we are not anyone's son-in-law, nephew, or cousin," he said.
Nevertheless, as the issues continued to escalate, the company's operations seemed to be struggling. According to insiders, Stripe and Bridge have terminated their partnerships with Kontigo, and users reported that PayPal no longer processes payments for the app. The Venezuelan cryptocurrency regulatory license held by Oha Technology expired on January 8.
The main public crypto wallet listed on Kontigo's official website has seen almost no trading activity in recent days. In the previous months, the wallet had weekly trading volumes of hundreds of thousands of dollars, but since January 19, only a few transactions of about $1 have occurred.
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