Tether to Freeze Wallets Linked to Sanctions Evasion in Venezuela’s Oil Industry

Tether, the issuer of the stablecoin USDT, recently announced that it would freeze wallets using the digital currency to circumvent sanctions on Venezuelan oil exports.

The decision was made following reports revealing that Venezuela’s state oil company PDVSA is increasing its use of Tether following the reimposition of U.S. government sanctions.

Key Point:

  • PDVSA’s use of the USDT stablecoin began last year and has accelerated due to concerns over Venezuela’s upcoming elections and US sanctions.
  • The use of cryptocurrencies allows PDVSA and its trading partners to avoid transactions in cash.
  • According to reports, PDVSA uses intermediaries when transacting in USDT, making it difficult to track transfers.

Read more: Central Bank of Nigeria to freeze bank accounts linked to Binance, Bybit, KuCoin

Tether ensured authorized addresses were frozen

A Tether spokesperson told CoinDesk that the company respects the OFAC SDN list and is committed to ensuring appropriate suspension of sanctioned addresses.

Venezuela began experimenting with cryptocurrencies in 2018, introducing the “Petro” token in response to economic instability caused by U.S. sanctions. However, this token was not adopted and was suspended earlier this year.

PDVSA and its trading partners recently turned to tethering as a way to avoid cash transactions that the United States could seize from foreign bank accounts.

Also read: Binance founder Changpeng Zhao should be sentenced to 3 years in prison: Department of Justice

Tether’s decision to freeze wallets related to sanctions evasion in the Venezuelan oil industry is not the first time a stablecoin issuer has taken action against illegal activity. Last October, Tether froze 32 crypto addresses associated with terrorism and war in Israel and Ukraine.

PDVSA’s decision by stablecoin issuers to crack down on the use of USDT serves as a reminder that the cryptocurrency industry is not immune to violations of international sanctions.

Vignesh Karunanidhi

Vignesh is an experienced professional in the cryptocurrency field since 2017. He has been writing for over 6 years and specializes in writing and editing different types of crypto content with an emphasis on sharing, such as news articles, long-form articles, and blog posts. The beauty of blockchain and cryptography.

Vignesh Karunanidhi

milk road lighter

Vignesh is an experienced professional in the cryptocurrency field since 2017. He has been writing for over 6 years and specializes in writing and editing different types of crypto content with an emphasis on sharing, such as news articles, long-form articles, and blog posts. The beauty of blockchain and cryptography.

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