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

Tether, the issuer of stablecoin USDT, has recently announced that it will freeze wallets that are using the digital currency to circumvent sanctions on oil exports in Venezuela.

The decision comes in response to a report revealing that Venezuela’s state-run oil company, PDVSA, has increased its use of Tether following the U.S. government’s reimposition of sanctions.

Key points:

• PDVSA’s use of USDT stablecoin began last year and has accelerated due to concerns about Venezuela’s upcoming election and United Stated sanctions.
• Using cryptocurrencies enables PDVSA and its counterparties to avoid conducting business in cash.
• According to reports, PDVSA uses intermediaries when transacting in USDT to make transfers harder to track.

Read more: Central Bank Of Nigeria To Freeze Bank Accounts Linked With Binance, Bybit, KuCoin

Tether ensured to freeze the sanctioned addresses

Tether’s spokesperson informed CoinDesk that the company respects the OFAC SDN list and is committed to ensuring the proper freezing of sanctioned addresses.  

Venezuela began experimenting with cryptocurrencies in 2018, introducing the “petro” token as a response to the economic instability resulting from U.S. sanctions. However, the token’s lack of adoption resulted in its suspension earlier this year.

PDVSA and its counterparties recently switched to tether as a way to avoid cash transactions that the U.S. could seize from foreign bank accounts.

Also read: Binance Founder Changpeng Zhao Should Face 3-Year Prison Sentence: DOJ

Tether’s decision to freeze wallets linked to sanctions evasion in Venezuela’s oil industry is not the first time the stablecoin issuer has taken action against illicit activities. In October last year, Tether froze 32 crypto addresses tied to terrorism and warfare in Israel and Ukraine. 

The stablecoin issuer’s decision to crack down on USDT usage by PDVSA serves as a reminder that the crypto industry is not immune to the consequences of violating international sanctions.