Ofac: Venezuela's crypto offering could be sanctions breach

Author: John Crabb | Published: 1 Mar 2018

The Venezuelan government last week commenced the pre-sale of the petro (PTR) cryptocurrency, its supposedly oil-backed token that it hopes will open the doors to foreign financing amid tough economic sanctions from the US. The Office of Foreign Assets Control (Ofac), the US Treasury agency that administers and enforces economic trade sanctions, has warned investors that purchasing the coin could be a breach of the economic restrictions enforced on the country.

Claims from President Nicolas Maduro suggested that initial demand has been strong, with over 17,000 orders in the pre-sale stage raising as much as $735 million. But subsequent reports – and data from the NEM blockchain on which the Petro is based - show otherwise. Confidence has not been much improved by Maduro’s hint at a second cryptocurrency, Petro Oro, which he suggests will be backed by gold.

The fledgling currency faces a multitude of political, technical and theoretical...