- USDT stablecoins issuer Tether has said it will freeze all accounts linked with Venezuelan oil sanctions.
- Tether’s decision comes after the US declared it has reimposed oil sanctions on the country.
- Venezuelan state-run oil company PDSA resorted to using USDT transactions for oil trades after an earlier sanction by the US and is set to double down on its crypto transactions.
Stablecoin issuer Tether has reiterated its continued commitment to freezing USDT addresses belonging to sanctioned entities. This announcement by Tether follows the recent report that Venezuela’s state-owned oil company PDVSA is using stablecoin USDT to evade sanctions.
People intimate with the matter have revealed that PDVSA plans to double down on its cryptocurrency use for crude oil exports after the US decided to reactivate its oil sanctions.
Last week, the US Treasury issued PDVSA customers and providers a limited wind-down notice with a deadline of May 31 to finish all pending transactions over the Venezuelan government’s refusal to make some necessary electoral reforms. Consequently, Venezuela is expected to experience lower export volumes as customers must seek individual authorization from the US government to trade with Venezuela.
Following the renewed sanctions and Venezuela’s resolve to continue transacting with USDT instead of the officially approved route with US customers, Tether has stated it is committed to cooperating with the US Treasury to block all payments linked to OFAC (Office of Foreign Assets Control) – sanctioned addresses.
“Tether respects the OFAC SDN list and is committed to working to ensure sanction addresses are frozen promptly.” said a Tether spokesperson.
Last year, Reuters reported that PDVSA was struck by a massive scandal that involved $21.2 billion in oil sales that the relevant entities could not account for. The gravity of this mammoth scandal led to the resignation of Venezuelan Energy Minister Tareck El Assami and his replacement by PDVSA chief Pedro Rafael Tellechea.
According to Reuters, the scandal was linked to little-known middlemen that PDVSA turned to after the initial US sanctions. The middleman model involved substantial discounts to customers and payment complications which adversely impacted PDSA’s revenue flow.
In October last year, the US lifted prior sanctions against the South American country, offering it a six-month license to trade freely with customers and providers in the US. The sanctions relief was in exchange for assurances that it will hold free and fair elections this year.
High-ranking US officials have accused the Nicolás Maduro-led government of its “repression” of political opponents and falling short of the commitment to free and fair elections.
“We are concerned that Maduro and his representatives prevented the democratic opposition from registering the candidate of their choice, harassed and intimidated political opponents, and unjustly detained numerous political actors and members of civil society,” said Matthew Miller, spokesman for the State Department last Wednesday.
Notwithstanding the US sanctions and license withdrawal, Venezuela’s Petroleum Minister Tellechea says “We will not stop, with or without a license.” Meanwhile, the US State Department says it will keep assessing the sanctions policy depending on the Maduro-led government’s actions leading up to the country’s July 28 presidential elections.