Trump Orders Sanctions Against Venezuela's Crypto

NEWS
Nikhilesh De
Mar 19, 2018 at 17:00 UTC  |  Updated  Mar 20, 2018 at 08:59 UTC

Donald Trump has signed an executive order imposing new sanctions against Venezuela for its controversial "petro" cryptocurrency.

The U.S. president was previously said to be preparing to sign an executive order imposing additional sanctions on the South American nation for its attempt to bypass existing economic restrictions, McClatchy DC reported on Friday. On Monday, Trump signed an order blocking any U.S. transactions in the petro, the White House announced.

Specifically, the executive order states:

"All transactions related to, provision of financing for, and other dealings in, by a United States person or within the United States, any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018, are prohibited as of the effective date of this order."

The sanctions represent the most notable development to date since Venezuela launched the petro in February. As stated at the time by government officials, Venezuela is seeking to use the cryptocurrency as a way to circumvent international sanctions.

That the Trump administration would make such a move is perhaps unsurprising; several U.S. lawmakers have sharply criticized the petro, with Senators Bob Menendez, Marco Rubio - and, later, Bill Nelson - writing letters to the Treasury Department asking how it would protect American investors and prevent Venezuela from raising money.

The Treasury Department has yet to respond directly to the letters' contents but did confirm that sanctions risks would apply to Americans purchasing the token. Menendez's office later confirmed to CoinDesk that he was continuing to press the department for a response.

The controversial token has received pushback from within Venezuela's borders as well. The nation's Congress denounced it as "illegal" and unconstitutional.

And while Maduro has claimed to have already garnered as much as $5 billion through the token's pre-sale, no evidence has yet been presented to back up this claim.

Coin Center executive director Jerry Brito said in a statement that there is "nothing new" about the U.S. issuing sanctions: "While Venezuela's attempt to issue a cryptocurrency is novel, there's nothing new about the U.S. restricting financial dealings with sanctioned countries. Issuing a cryptocurrency is not going to help Venezuela escape sanctions."

Editor's note: This article has been updated with a statement. 

Donald Trump image via Alexandros Michailidis / Shutterstock

 

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

VenezuelaDonald TrumpPetroNicolas Maduro

Load Comments