Tether Aims to Freeze Addresses in Response to PDVSA's Crypto Usage to Bypass Sanctions
Summary:
Tether is committed to freezing addresses associated with sanctioned entities, following a report that Venezuela's state-run oil company, PDVSA, is using its stablecoin to circumvent sanctions. Reacting to re-imposed US oil sanctions, PDVSA is allegedly utilising digital currency to enable crude oil and fuel exports. The new sanctions will necessitate US authorisation for businesses to trade with Venezuela, leading PDVSA to switch oil transactions to Tether to avoid these complications. Allegedly, in 2024, PDVSA altered oil deal structures to require advance payment in Tether, additionally mandating new clients hold digital currency in a virtual wallet.
Tether, the issuer of USDT, is committed to freezing any associated addresses with entities that are covered by sanctions. This action follows a revelation that Venezuela's government-operated oil company, PDVSA, has been utilizing the cryptocurrency to side-step sanctions. This information has been confirmed by a representative from Tether, who expressed the company's seriousness in halting transactions affiliated with the entities on OFAC's sanction list. The spokesperson emphasized, "Tether is devoted to swiftly freezing sanctioned addresses in adherence to the OFAC SDN list."
This news arose after Reuters posted an exclusive report alleging that PDVSA has been employing digital currency to aid in the exportation of its crude oil and fuel. This comes in the wake of a new wave of oil sanctions imposed on Venezuela by the United States. The report further pointed out that the sanction imposition demands PDVSA's clients and suppliers to terminate transactions by May 31 as a consequence of Venezuela's laxity in carrying out electoral overhauls.
The article, backed by anonymous informants, suggests that these new sanctions will complicate Venezuela's effort to expand its oil product and exports as doing business with the nation will now demand U.S. permits. It's alleged that PDVSA has switched its oil sale transactions to Tether (USDT) to avoid getting caught in the crosshairs of the new sanctions and to prevent the freezing of funds in overseas banks. In 2023, it was hinted that these cryptocurrency payments were related to a corruption outrage at PDVSA where around $21 billion earnings from oil exports were unaccounted for.
Reuters’ insiders also allege that PDVSA converted its spot oil deals in 2024 to a contract structure which demands advance payment for exported consignments in USDT. Furthermore, it is conjectured that the Venezuelan government-controlled oil company mandates new clients wishing to conduct oil transactions to maintain digital currency in a virtual wallet. It is understood that firms keen to re-commence business with PDVSA, following a six-month accreditation approval by the U.S. in October 2023, had to use middlemen to handle the digital currency payment requisites.
Published At
4/23/2024 5:42:18 PM
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