USDT move by Venezuela’s PDVSA triggers freezing threats from Tether

2024-04-23 14:28:28 Eastern Standard Time

Venezuela’s state-run oil company PDVSA is facing harsh action from Tether, the issuer of the USDT stablecoin.

In an effort to avoid oil sanctions imposed by the United States,

PDVSA has reportedly turned to cryptocurrencies, specifically USDT

to promote crude oil and fuel exports.

Tether’s reaction to PDVSA’s crypto move

Tether has vowed to freeze assets associated with sanctioned entities in response to reports of PDVSA’s intention to use USDT to evade sanctions.

Venezuela, facing new oil sanctions from the United States, is seeking alternative routes to maintain oil exports amid tightening regulations.

The US Treasury’s request for PDVSA customers and providers to complete transactions by May 31 has spurred the national oil company to consider non-traditional payment methods. According to Reuters, PDVSA’s recent move to cryptocurrency payments is seen as a strategic move to avoid impending sanctions.

According to reports, PDVSA is moving oil sales to Tether to prevent funds in foreign bank accounts from being frozen when sanctions come into effect.

This is not the first time PDVSA has been associated with cryptocurrency payments. In 2023,

report

Linked cryptocurrency payments to PDVSA corruption scandal involving $21 billion in unspent oil export credits.

Tether Compliant with Regulatory Standards

Tether’s actions are consistent with the company’s commitment to compliance with regulatory standards. The company recognizes the importance of complying with Office of Foreign Assets Control (OFAC) sanctions and has committed to immediately freezing addresses associated with sanctioned entities.

In a statement to major media outlets, a Tether spokesperson emphasized the company’s commitment to respecting the OFAC SDN list and blocking payments related to sanctioned entities. This proactive stance emphasizes Tether’s role in complying with international regulations and preventing the misuse of stablecoins for illicit purposes.

The clash between PDVSA’s efforts to evade sanctions through cryptocurrencies and Tether’s determination to remain compliant with regulations highlights the complex interplay between technology, finance, and geopolitics.

As Venezuela seeks ways to circumvent sanctions, Tether’s response highlights the challenges posed by the intersection of traditional regulatory frameworks and emerging digital currencies.

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USDT movement by Venezuela’s PDVSA triggers freeze threat by Tether

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