Tether has declared that it will freeze all wallets linked to Venezuela’s efforts to circumvent American restrictions on oil sales exports.
Based on recent findings that PDVSA, Venezuela’s national oil company, has been using more USDT (Tether’s stablecoin) due to American sanctions, the decision has been made.
Venezuela’s PDVSA Turns to Tether Amid Sanctions
Based on a Reuters article, PDVSA, Venezuela’s national oil company, shifted to utilizing Tether’s USDT in response to fresh export sanctions.
Last December, Tether followed a comparable approach and halted access to 161 digital wallets in accordance with U.S. financial restrictions.
A representative from Tether, the stablecoin issuer, stressed their compliance with sanctions by saying, “Tether adheres to the OFAC SDN list and works diligently to correctly freeze any designated sanctioned accounts.”
PDVSA is adopting more cryptocurrency transactions as part of a larger plan to lessen the impact of renewed US sanctions, imposed because Venezuela hasn’t made required electoral changes.
PDVSA can carry out transactions using cryptocurrencies such as USDT, thereby reducing the likelihood of their assets being confiscated by American law enforcement. According to Reuters, PDVSA employs intermediaries to conceal the origin and destination of these USDT transactions.
Yet, a more recent PDVSA controversy has added complexity, with probes revealing approximately $21 billion in unaccounted-for income from oil sales. This issue is connected to previous deals involving cryptocurrencies, making the situation even more intricate.
USDT Prepayment for Oil Deals
Starting from 2024, PDVSA changed the terms of its oil sales on the spot market. Now, buyers are required to pay half of the cargo value in USDT (U.S. Dollars Tether) upfront before receiving the oil. Prospective customers aiming to purchase Venezuelan crude must have a digital wallet that supports cryptocurrency transactions.
Additionally, the US government gave its approval for commercial dealings with PDVSA to restart in October. This authorization came in the form of a six-month permit granted by Washington, enabling trading companies and previous PDVSA clients to resume their business relationships with Venezuela. Nevertheless, due to digital transaction prerequisites, numerous intermediaries had to be enlisted by these entities to handle the transactions.
Venezuela began exploring digital currencies in 2018 with the creation of the “petro” token as a means to lessen the economic instability caused by American sanctions. Unfortunately, the petro failed to gain traction and was subsequently put on hold earlier this year.
Currently, the Office of Foreign Assets Control (OFAC) has been increasing its focus on the cryptocurrency sector. In December alone, OFAC levied penalties totaling $1.2 million against CoinList, a crypto exchange, for assisting Russian users in bypassing sanctions. Prior to this, OFAC had imposed sanctions on a North Korean crypto mixer believed to be utilized by hackers.
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2024-04-24 18:54