In response to a recent Reuters report revealing that Venezuela's state-run oil company, PDVSA, has been utilizing cryptocurrencies to get around its oil and fuel exports sanctions.
In response to a recent Reuters report revealing that Venezuela's state-run oil company, PDVSA, has been utilizing cryptocurrencies to get around its oil and fuel exports sanctions, Tether, the issuer of the popular stablecoin USDT, has announced its commitment to freezing addresses associated with sanctioned entities. Tether's spokesperson emphasized the company's respect for the Office of Foreign Assets Control (OFAC) SDN list and its dedication to promptly freezing addresses linked to sanctioned entities.
The report from Reuters, which cited anonymous sources, highlighted that Venezuela is facing renewed oil sanctions imposed by the United States. The U.S. Treasury Department has set a deadline of May 31 for PDVSA customers and service providers to wind down transactions due to Venezuela's failure to implement required electoral reforms.
According to the sources, the reimposed sanctions will pose challenges for Venezuela in increasing its oil production and exports because companies will need authorization from the U.S. to engage in business with the South American nation. To mitigate the risk of funds being frozen in foreign bank accounts as the new sanctions take effect, PDVSA has reportedly shifted its oil sales to Tether's USDT stablecoin.
The report further suggests that PDVSA has adjusted its spot oil deals in 2024 to a contract model that necessitates prepayment for exported cargo in USDT. Additionally, the state-run oil company allegedly requires new customers engaging in oil transactions to hold cryptocurrency in a digital wallet.
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