From Silicon Valley Darling to Sanctions Target: How a Startup Crossed the Venezuelan Red Line

Once celebrated as a Silicon Valley darling, a startup has recently become the focus of international sanctions. This company, which initially gained praise for its innovative technology and rapid growth, has now been accused of violating foreign policy regulations by engaging in activities that threaten national security interests. The controversy highlights the complex challenges faced by tech companies operating across borders, especially when their actions inadvertently or deliberately touch sensitive geopolitical nerves. As governments tighten restrictions and scrutinize such enterprises, the startup's journey underscores the fine line between innovation and compliance in a highly regulated global environment.

Written by: Ben Foldy

Translated by: Luffy, Foresight News

Original Title: How a Silicon Valley Startup Became Venezuela’s Cryptocurrency Lifeline

Fintech startup Kontigo’s founder readily embraced Silicon Valley strategies: moving the company into a residential building in San Francisco, hosting hackathons suitable for TikTok dissemination; peppering pitches with buzzwords, claiming to build a “new bank for Latin America”; and even boldly stating plans to pioneer the Mars economy.

This approach helped the relatively small, flamboyant crypto startup secure a spot in top incubator Y Combinator, and raise over $20 million last December from well-known Silicon Valley investors like Coinbase Ventures.

However, recent U.S. military actions in Venezuela have cast a spotlight on a controversial aspect of Kontigo’s operations: it has become a critical channel for the flow of funds into and out of the Venezuelan economy, which is under strict sanctions.

Today, Kontigo faces service disruptions from banks and payment networks, including JPMorgan Chase, Stripe, and Bridge, while also dealing with allegations of undisclosed connections to the ousted Maduro regime—an accusation the company denies.

A Kontigo spokesperson declined to comment on business details but stated in a release that the company is reviewing its operational model.

“Kontigo is committed to expanding financial access to underserved communities,” the spokesperson said. “We are conducting an internal review and will share updates at the appropriate time. We comply with U.S. laws, including sanctions regulations, and are evaluating our current compliance processes and mechanisms, which will be improved as necessary.”

Founded in 2023 by Venezuelan Jesus Castillo, Kontigo portrays itself as a “David” poised to defeat mainstream banking giants. The company claims that its platform has facilitated over $1 billion in transactions for 1.2 million users across Latin America and South America. The app allows users to exchange hard currencies for stablecoins pegged to the dollar, enabling payments and integration with traditional banking systems.

Outside Venezuela, the company presents itself as a platform helping ordinary Latin Americans facing hyperinflation. But within Venezuela, it has become a conduit to bypass U.S. sanctions aimed at severing the Maduro regime’s key sectors from the international financial system.

According to a presentation from an invite-only partner event in Caracas last December, 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, channeling oil revenues back into the domestic economy in the form of cryptocurrency.

As sanctions cut off Venezuela’s traditional financial channels, the government increasingly relies on stablecoins for oil sales. The economist showed that nearly 80% of the country’s oil income in the second half of last year was received in stablecoin payments. These funds are then exchanged for bolivars through banks, informal trading desks, and government-authorized crypto exchanges like Kontigo.

One slide read: “Crypto markets come to the rescue.”

For months, Kontigo has been providing a service through intermediaries that allows users to transfer funds between JPMorgan Chase accounts in the U.S., transactions that are mostly prohibited under sanctions.

At the end of last year, JPMorgan suddenly took steps to cut off these channels. According to sources, Stripe, which handled payments and transactions for Kontigo, also terminated its partnership.

Sources say that when Kontigo partnered with another U.S.-based financial institution, company executives told the partner that they had no actual operations inside Venezuela. The partner recently took measures to end the cooperation.

Under U.S. sanctions, Venezuela turns to stablecoins for oil sales

Within the U.S.: A high-profile startup

Castillo co-founded Kontigo with the original idea of using blockchain technology to solve Venezuela’s daily financial struggles, where hyperinflation and credit shortages make it difficult for citizens to preserve savings. The platform allows users to convert bolivars into more stable, dollar-pegged cryptocurrencies.

To U.S. investors, Castillo packaged his startup as a group of ambitious immigrants striving to succeed, early investors said they were attracted by the vision of helping those truly in need.

In promotional materials, the company claimed Castillo and his colleagues took turns working Uber at night to make ends meet while building the company, aiming to create a financial system suited for the “multi-planetary era of abundance,” avoiding “exporting Earth’s monetary and economic failures to Mars.”

By mid-2025, according to a promotional video on LinkedIn, Kontigo began offering users free “virtual” JPMorgan Chase bank accounts in the U.S. The accounts are said to be provided through another fintech startup, Checkbook, with no direct banking relationship between JPMorgan Chase and Kontigo. Nonetheless, the Chase brand was used in advertisements.

Last December, just weeks before the U.S. raid to overthrow Maduro, Kontigo announced it had raised $20 million from investors including Coinbase Ventures, Alumni Ventures, and DST Capital. Coinbase, Alumni, and DST did not respond to requests for comment.

After the funding, Castillo posted a video on LinkedIn bragging about a $23 million Silicon Valley mansion where he and his seven-person team would live undisturbed, aiming to reach $100 million in annual revenue within 60 days.

“If you’re not willing to move your entire team to San Francisco and lock yourselves in a house until you hit your goals, then you’re not serious. You don’t have our hunger for success, and you’re destined to fail,” Castillo said.

A promotional video stated that the recent funding coincided with a rebranding effort, claiming Kontigo enables any user worldwide to buy and sell dollar-pegged cryptocurrencies without providing identification documents.

“Jamie Dimon, we’re coming,” Castillo wrote on LinkedIn, addressing JPMorgan Chase’s CEO, once again claiming to build the “world’s largest bank.”

A large screen displaying the Kontigo cryptocurrency app interface, with a balance of $5,000 and transaction history

Inside Venezuela: A Different Narrative

In Venezuela, Kontigo operates with a license issued by the country’s cryptocurrency regulator, Sunacrip, authorized to conduct crypto business. The license was granted to a Venezuelan company called Oha Technology, signed by the Venezuelan Minister of Finance.

Kontigo appears to have tried distancing itself from Oha, claiming it works with local institutions in all markets. However, until recently, its official website still listed its Sunacrip license and identified Oha as a Venezuelan subsidiary. Castillo’s personal webpage shows he served as COO of Oha AI. Private chat messages seen by The Wall Street Journal reveal that Castillo celebrated obtaining the Sunacrip license in January 2025 and shared the license document.

At an invite-only presentation in Caracas, the company’s spokesperson emphasized the growing importance of cryptocurrency in Venezuela’s economy. Economist Asdrúbal Oliveros told the audience that sanctions-affected oil revenues are received in stablecoins and then flow into Kontigo and other licensed crypto platforms like Crixto.

Venezuelan Kontigo users can transfer funds to their Venezuelan bank accounts via the app, even if those banks are under U.S. Treasury sanctions.

Turning Point

Just weeks after announcing its successful funding, Kontigo’s situation rapidly deteriorated.

At the end of December, The Information published an article revealing that JPMorgan Chase had cut off services to Kontigo.

A few days later, U.S. military actions ousted President Maduro. Soon after, influential independent fintech journalist Jason Mikula published an article accusing Kontigo of secretly being connected to one of Maduro’s sons.

Kontigo quickly responded.

When Klarna CEO Sebastian Siemiatkowski shared Mikula’s article on X, Kontigo’s official account replied that the company “will hold those spreading false information accountable for damaging the company’s reputation.”

Subsequently, Kontigo informed users that the platform had been hacked, resulting in a total loss of about $341,000 for 1,005 users. The company said it fully compensated the losses.

In a 9-minute video posted on social media on January 12, Castillo spoke in Spanish, stating that the platform was under attack from hackers and critics, and denied any connection to the Maduro regime.

“The truth is, Kontigo’s success is the result of years of effort, resilience, and persistence. We are not anyone’s son-in-law, nephew, or cousin,” he said.

Nevertheless, as the issues continued to escalate, the company’s operations appeared to be struggling. Sources say Stripe and Bridge have ended their partnerships with Kontigo, and users report that PayPal no longer processes payments for the app. The Venezuelan crypto license held by Oha Technology expired on January 8.

Kontigo’s main public crypto wallets have seen almost no activity in recent days. For months, these wallets averaged transactions worth tens of thousands of dollars weekly, but since January 19, only a few single transactions of about $1 have been recorded.