Tether vows to freeze assets after Venezuela looks to crypto to bypass oil sanctions

Tether, the issuer of USDT, announced it will prevent transactions from sanctioned entities’ associated addresses at their request, according to reports suggesting Venezuela’s state oil company used USDT for sanctions evasion.

A representative from Tether assured CryptoMoon that the organization continues to prevent transactions with entities subject to sanctions by the Office of Foreign Assets Control (OFAC).

“Tether respects the OFAC SDN list and is committed to working to ensure sanction addresses are frozen promptly.”

After anexclusive Reuters article, it was revealed that PDVSA, Venezuela’s national oil company, has allegedly employed cryptocurrencies for conducting its crude oil and fuel sales in the wake of fresh US oil sanctions against the country.

Based on the information from the report, the U.S. Treasury Department is compelling PDVSA’s clients and business partners to conclude all transactions by May 31 as a response to Venezuela’s lack of action in implementing necessary electoral reforms.

According to an unnamed source in a recent report, the restored sanctions are expected to impede Venezuela’s ability to expand its oil production and exports since businesses must obtain U.S. approval to deal with the South American country.

According to reports, PDVSA has shifted some of its oil sales to the digital currency Tether (USDT) as a protective measure to prevent their funds from being blocked in external bank accounts with the implementation of fresh sanctions.

In 2023, reports uncovered a corruption scandal at PDVSA where cryptocurrency transactions worth $21 billion for oil exports went undocumented.

According to Reuters’ sources, PDVSA has changed its 2024 spot oil deals into contractual agreements with prepayment in USDT (Tether dollars). Furthermore, potential new clients for Venezuelan oil transactions are expected to have cryptocurrency in a digital wallet.

Companies looking to work with PDVSA again after receiving US licensing approval in October 2023 had to use intermediaries to handle cryptocurrency transactions.

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2024-04-23 18:03