- Tether vows to freeze assets linked to OFAC-sanctioned entities after reports that Venezuela’s state-run oil company PDVSA is using USDT to bypass oil sanctions
- PDVSA has reportedly been moving its oil sales to Tether (USDT) to avoid funds being frozen in foreign bank accounts due to new U.S. sanctions
- Sources claim PDVSA has reworked its oil deals to require prepayment for exported cargo in USDT and new customers must hold cryptocurrency in digital wallets
Venezuela’s state-run oil company PDVSA has reportedly turned to cryptocurrency payments in Tether (USDT) to circumvent US sanctions and continue exporting oil. This comes after the US reimposed sanctions on Venezuelan oil exports in response to the country’s failure to implement electoral reforms.
PDVSA Uses USDT to Avoid Frozen Funds
According to anonymous sources cited by Reuters, PDVSA has been requiring buyers to pay for oil exports in USDT in order to avoid having funds frozen in foreign bank accounts. The sources claim PDVSA has reworked its spot oil deals to require prepayment in USDT, and is mandating that new customers hold crypto in digital wallets to conduct transactions.
Companies Seeking to Resume Business With PDVSA Using Crypto Intermediaries
The report states that companies which received temporary sanction waivers in October 2022 have had to use cryptocurrency intermediaries to meet PDVSA’s payment requirements in USDT. The sanctions have made it difficult for Venezuela to increase oil exports, as transactions require approval from US authorities.
Tether Commits to Freezing Sanctioned Addresses
In response to the report, Tether has stated it remains committed to freezing addresses linked to entities sanctioned by the US Office of Foreign Assets Control (OFAC). By using cryptocurrencies like USDT, Venezuela aims to bypass the upcoming sanctions that will further restrict its oil exports.
Conclusion
Venezuela’s adoption of cryptocurrency payments highlights how digital assets allow countries to circumvent economic sanctions imposed by foreign powers. However, Tether’s commitment to enforce OFAC’s sanctions list also shows the limitations of using crypto to evade such measures. The situation illustrates the emerging role of cryptocurrencies in global trade and geopolitics.
