Trump Prohibits US Purchases of Venezuelan Cryptocurrency

Sheri Evans
March 20, 2018

President Donald Trump today moved to prevent Venezuela from trying to use its new cryptocurrency, the Petro, to circumvent sanctions, a prelude to expected further sanctions on South America's second-largest oil producer.

Sec.2. (a) Any transaction that evades or avoids, has the objective of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.

"This is a new expansion and prohibition from where we were before", a senior White House official said. As stated at the time by government officials, Venezuela is seeking to use the cryptocurrency as a way to circumvent worldwide sanctions.

Trump today barred USA citizens and companies from dealing in the petro, which Venezuela launched last month as a way to circumvent United States sanctions, with immediate effect.

Still, world markets didn't receive the Petro with open arms, as doubt was cast on the government's claim that it's backed by Venezuelan oil reserves.

Coin Center executive director Jerry Brito said in a statement that there is "nothing new" about the US issuing sanctions: "While Venezuela's attempt to issue a cryptocurrency is novel, there's nothing new about the USA restricting financial dealings with sanctioned countries".

The US Treasury warned domestic investors back in February not to touch petro in case it violated sanctions, saying "the petro digital currency would appear to be an extension of credit to the Venezuelan government" and "could therefore expose US persons to legal risk".

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The Venezuelan government has been under pressure to stabilize the country as record money outflows and falling revenues from oil sales have hampered the economy in recent years. "Issuing a cryptocurrency is not going to help Venezuela escape sanctions".

"This is about providing oxygen to people, not the government", Jimenez said. Venezuela is said to be one of the hot topics in discussion at the meeting.

A senior administration official told journalists Monday that while the us can't block Venezuela from developing the petro, the global reach of the American financial system means its ban will have far-reaching consequences around the world and may force other countries to follow suit.

In its own statement on Monday, Treasury said it was hitting the four current and former Venezuelan officials with sanctions that freeze any assets they may have in US jurisdictions and bar Americans from doing business with them.

Jimenez, whose preference for sneakers and jeans exude a sort of nerd aesthetic not unlike his entrepreneurial role models in Silicon Valley, said he never meant to help circumvent USA sanctions.

Instead, he talks of "democratizing" access to global financial system for struggling entrepreneurs and decentralizing Venezuela's government-run foreign exchange system, which many blame for the economy's depressed state. "Doing nothing would be irresponsible".

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