Petro Couldn’t Save the Cartel of the Suns Conspiracy From the Sting of Sanctions

Petro Couldn’t Save the Cartel of the Suns Conspiracy From the Sting of Sanctions

The international sanctions effectively acted as an embargo isolating Venezuela economically, and Petro cannot help Maduro save the country’s economy

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At the end of February, the United States Immigration and Customs Enforcement revealed its Cryptocurrency Intelligence Program, which targets peer-to-peer and darknet markets for the illicit use of cryptocurrencies. Then, in a press conference one month later, the U.S. Department of Justice indicted Venezuelan President Nicolas Maduro and 14 other top officials in the country. The charges include leveraging political offices, financial systems and cryptocurrencies for conducting and concealing a massive government-run drug-trafficking, narco-terrorism and corruption operation for over 20 years. This systemic corruption raided Venezuela of billions of dollars and economically wrecked the country, according to the U.S. prosecutors.

The U.S. maintains that Maduro and the “Cartel of the Suns,” a drug-trafficking organization comprising high-level military, government officials and intelligence operatives, weaponized 250 metric tons of cocaine against the U.S., which they allegedly delivered via Central America by airplane or via the Caribbean by boat.

“Maduro and the other defendants expressly intended to flood the United States with cocaine in order to undermine the health and wellbeing of our nation,” U.S. Attorney Geoffrey Berman asserted

In a separate indictment, the Southern District of New York charged Venezuela’s superintendent of cryptocurrency, Joselit Ramirez Camacho, and others for engaging in a series of crimes in an attempted evasion of U.S. Office of Foreign Assets Control sanctions. According to court papers, Camacho instructed a U.S. person to open a bank account and set up a shell corporation in Istanbul, Turkey, to be used in a scheme to launder the proceeds of their illicit activity in order to evade OFAC’s sanctions.

Alysa Erichs, the acting executive associate director of ICE’s Homeland Security Investigations, explained in the DOJ press release: 

“The collaborative nature of this investigation is representative of the ongoing work HSI and international law enforcement agencies perform each day, often behind the scenes and unknown to the public, to make our communities safer and free from corruption. […] HSI’s global reach and commitment to aggressively identify, target and investigate individuals who violate U.S. laws, exploit financial systems and hide behind cryptocurrency to further their illicit criminal activity. Let this indictment be a reminder that no one is above the law — not even powerful political officials.”

World’s first national cryptocurrency — Petro

The concept of national, bi-national and multinational cryptocurrencies have attracted many governments across the world, particularly those that have been sanctioned by the U.S. — i.e., Venezuela and Iran — but others as well, such as Saudi Arabia, the United Arab Emirates, Russia, China, the European Union and Turkey

Notes: SPFS, CIPS.

The U.S. sanctions against Venezuela have largely isolated the country from the global financial system. As a way to circumvent wide-ranging U.S. sanctions and overcome chronic liquidity shortages, Wilmar Castro Soteldo, Venezuela’s agriculture minister, supported the creation of a state-sponsored cryptocurrency based on the gold standard or other resources — similar to Iran’s national cryptocurrency, Peyman — in order to save Venezuela’s economy and supplant the U.S. dollar’s hegemony.

After all, Iran is known for implementing the most creative, commodity-based, barter-style schemes to evade sanctions in modern history. These schemes have involved various countries — using the so-called “gas-for-gold” loophole — as well as the “Instrument for Supporting Trade Exchanges,” or INSTEX — a new cryptocurrency-based international payment gateway in the EU with barter-style features — in order to avoid the U.S. financial system and the sanctions crippling the country’s ability to trade with the world.

In December 2017, in a televised press conference, Maduro announced that his government was planning to issue a cryptocurrency/stablecoin, called the Petro, that would be backed by the country’s oil, gold and mineral reserves — and would be convertible into a number of fiat currencies, such as the Russian ruble, the Chinese yuan, the Turkish lira and the euro.

Related: Central Bank-Issued Digital Currencies: Why Governments May (or May Not) Need Them

The Petro’s development was heavily influenced by former U.S. congressional intern Gabriel Jimenez. It is hosted on a blockchain platform that has been accused of being designed as a clone copy of Dash (DASH) in order to avoid detection by law enforcement officials.

Related: Sanctions Compliance for Transactions in Fiat and Cryptocurrencies Are the Same: Expert Take

U.S. sanctions

Shortly after the Petro’s launch on Feb. 20, 2019, in an executive order dated March 19, 2018, U.S. President Donald Trump banned U.S. persons from buying any digital currency, digital coin or digital token that was issued by, for or on behalf of the government of Venezuela on or after Jan. 9, 2018. This ban was amended to include the risk of exposure to U.S. sanctions to any U.S. persons transacting with Venezuela’s national oil and gas company Petróleos de Venezuela regardless of the currency of the transaction.

Set against falling oil prices, the sanctions against Venezuela — which has the world’s largest oil reserves and where oil makes up 98% of the country’s export earnings — acted as an embargo that has ruined its economy. Accordingly, Maduro had to get even more innovative, pushing him further into the drug trafficking and sanctions-busting oil/gold/crypto trades. Maduro instituted measures to increase Petro’s use by announcing plans to use Petro for selling Venezuelan oil and stepped up sales of gold in sanctions-busting transactions similar to Iran’s commodity-based, barter-style schemes. 

During the past few years, Maduro has resorted to selling tons of Venezuela’s federal gold reserves as well as gold from illicit mining ventures to companies in places such as Switzerland, the UAE and Turkey using accounts in obscure banks. They transported bricks of gold — 23 tons of which was removed from the country’s bank vaults, according to published reports — onto privately chartered aircraft for flights to Istanbul, eventually intended for sale to European banks with the involvement of Colombia’s National Liberation Army. Last year, the DOJ charged a Turkish bank and an Iranian gold trader for evading U.S. sanctions on Iran.

Recently, Russian state-controlled oil company Rosneft ended its operations in Venezuela, and sold all of its assets in the country to the Kremlin after the U.S. Treasury sanctioned its trading arm. Therefore, any future U.S. sanctions on Russian-controlled oil operations in Venezuela could target the Russian government/Kremlin directly.

Conclusion

It is yet to be seen if others involved in Venezuela’s international crypto-barter trades will face indictments from the DOJ for circumventing U.S. sanctions. The U.S. is offering a $15-million reward for information leading to the arrest and/or conviction of Maduro, as well as $10-million rewards for Diosdado Cabello, the president of Venezuela’s National Constituent Assembly; Tareck El Aissami, the vice president for the economy; Hugo Carvajal, a former director of military intelligence; and Clíver Alcalá Cordones, a retired major general.

The indictment of Maduro and his 14 cabinet members come subsequent to the conoravirus’s arrival in Venezuela — which has a nationwide quarantine in place since March 16. An oil price war and fears of a global recession have driven the price of oil to an 18-year low of $24 per barrel, less than half of what it was in February. Oil-producing countries break even at a price in the mid-$80s per barrel. 

The price of the Petro, Venezuela’s national digital currency put forward to avoid the sting of U.S. sanctions, is not known.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Selva Ozelli, Esq., CPA, is an international tax attorney and certified public accountant who frequently writes about tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.


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The international sanctions effectively acted as an embargo isolating Venezuela economically, and Petro cannot help Maduro save the country’s economy

Venezuelans Selling Petro on LocalBitcoins at Half the Official Price

Venezuelans Selling Petro on LocalBitcoins at Half the Official Price

Venezuelans have turned to LocalBitcoins to sell their airdropped Petro

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Venezuelans are reportedly selling the state-launched Petro (PTR) cryptocurrency that was airdropped to them recently. Though the government claims to have fixed the value of one PTR at $60, the market price on LocalBitcoins is reported to be only half of that.

According to a Reddit thread, Venezuelans are turning to LocalBitcoins to sell their airdropped Petro amid disastrous economic conditions. This follows an airdrop to a claimed 6 million people in December.

The Reddit user claims that the government initially allowed the usage of Petro to buy products through a biometric app, but it soon shut it down as people flooded to the few stores that supported it.

Some government exchanges are reported to support PTR as well, but the exchange rate deviated too much from the “official” price.

The only option left for Venezuelans appears to be LocalBitcoins. Several listings can be found that accept Petro in exchange for Bitcoin or other currencies. However, all of them appear to be currently inactive. Several listings were still shown on the main page as late as Jan. 20.

Source: LocalBitcoins.com

Source: LocalBitcoins.com

Cointelegraph reached out to Ernesto Pinto, one of the sellers on LocalBitcoins for clarifications.

He confirmed that he does buy Petro from Venezuelans in exchange for Bitcoin (BTC). Pinto explained that the price was referenced from a local exchange, Amberescoin, which supported Petro. It amounted to 0.0036 BTC, or approximately $30 for one Petro.

But the sellers are struggling due to the excessive selling pressure from the airdrop. Pinto is unable to accept Petro, as he cannot complete the full exchange cycle and sell the Petro he received previously.

Pinto explained why:

“The majority want to sell it because of an airdrop, where 8 million people want Bolivars because the Bolivar makes it easier to purchase things.”

He also referred to a Telegram group where Venezuelans discuss and try to exchange Petros. One particular user in the chat asked for options in Maracaibo, a region in the country:

“Anyone who sells food, rice, flour, sugar etc. and accepts Petros in Maracaibo?”


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Venezuelans have turned to LocalBitcoins to sell their airdropped Petro

Maduro Announces Crypto Casino in Support of Petro and Public

Maduro Announces Crypto Casino in Support of Petro and Public

Venezuela’s Maduro announces crypto casino to run on country’s Petro

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Nicolas Maduro, president of Venezuela, announced on Friday the opening of a new crypto-run casino in a battered country where betting halls have all but gone extinct. 

A casino for relief

Maduro said Ávila National Park’s Hotel Humboldt will soon be home to an international casino that will operate with Petro (PTR), Venezuela’s state cryptocurrency, and that proceeds will fund the country’s public health and education sectors. 

The announcement comes less than a decade after Maduro’s mentor, former president Hugo Chavez, ordered the closure of all betting places as harbors of prostitution, drugs and crime. Since 2011, as the then-relatively-prosperous country has degraded, only a limited number of online platforms have allowed Venezuelans to gamble. 

What is this place, anyway?

While the casino seems to lack a name, Maduro’s enigmatic announcement comes with plenty of questions. He kept mum on the casino’s exact opening and whether the establishment, located in the “lungs of the city,” will give oxygen to similar venues. The logistics of how the casino will run — must guests use the Petroapp? Will the casino house crypto ATM’s? How will winners collect their spoils? — also remain a mystery. 

Perhaps the announcement’s most poignant question is how, in a country that now lags globally in education and suffers a gutted public health structure, will the crypto casino’s funds support dire public health and education needs?

Given the Venezuelan government’s history of not delivering on promises related to the Petro, Cointelegraph advises readers to approach news on the subject with skepticism.

The power of crypto

As Cointelegraph reported last week, Madura announced plans for Venezuela t sell the reserves — 4.5 million barrels of oil — of its state-run oil and gas company, PDVSA, for Petro. 

According to Maduro, the sale will help Venezuela “open roads to the new economy” and build a world of “peace and integration of peoples, their happiness and improvement.”


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Venezuela’s Maduro announces crypto casino to run on country’s Petro

Venezuelan Exchange Rolls Out Crypto Debit Card with Petro Support

Venezuelan Exchange Rolls Out Crypto Debit Card with Petro Support

Venezuelans get a crypto debit card without fiat

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Two Venezuelan companies have partnered to release a cryptocurrency debit card and point-of-sale (PoS) system.

“Crypto transfer device” supports four currencies

According to a social media release by state-sanctioned exchange CriptoLAGO on Oct. 1, the joint offering with so-called “investment cryptobank” Glufco is already taking orders. Translated part of the announcement states: 

“What we were waiting for, our alliance with Glufco, puts us at the forefront.” 

The system will provide support for Bitcoin (BTC), Ether (ETH), Dash (DASH) and Petro, the Venezuelan government’s state-backed digital currency. 

Neither offering, it appears, will feature support for fiat currency, including the country’s troubled Sovereign Bolivar (VES). 

Glufco refers to its product as a “cryptocurrency transfer device,” and hints that in future, further cryptocurrencies could receive support automatically.

No diminishing of economic misery

Venezuela continues to battle with rampant inflation and capital controls, leaving citizens with little choice but to use Petro and the VES. Bitcoin trading on P2P platform Localbitcoins has set new records in the recent weeks.

At the same time, late last month, Venezuela’s central bank unveiled a sudden plan to stockpile Bitcoin in the face of wide-ranging international sanctions. 

As Cointelegraph reported, the country’s largest bank, Banco de Venezuela, added what appeared to be an experimental cryptocurrency feature to its online banking options last month.


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Venezuelans get a crypto debit card without fiat

Venezuelan Official Says Remittance Platform for Petro is Ready to Use

Venezuelan Official Says Remittance Platform for Petro is Ready to Use

A Venezuelan crypto official encourages citizens to use a Petro-friendly remittances platform

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National Superintendent of Cryptoactives Joselit Ramírez has announced that crypto remittance platform Patria Remesa is live and functioning.

Radio announcement about the platform

The Bolivarian Government of Venezuela reported the news on Aug. 27. According to the report, Ramírez said that Patria Remesa was ready for use on a radio show that he hosts on Radio Nacional de Venezuela. Additionally, Ramírez highlighted his confidence in the platform’s safety, as well as how the Venezuelan cryptocurrency El Petro (PTR) allegedly hedges against economic depreciation.

A brief overview of the Petro

Regarding the Petro itself, Ramírez explained:

„The Petro was a plan designed by the President of the Republic, Nicolás Maduro, to counter the attacks of imperialism and heal the wounds of war.”

As previously reported by Cointelegraph, President Maduro created the Petro in order to dodge economic sanctions imposed on Venezuela by the United States and other countries. Maduro said that the Petro would be backed by the country’s various assets, including oil, gasoline, gold and diamonds.

However, the launch of the Petro has been plagued by a number of issues, including Parliamentary Deputy Jorge Millan’s allegations that the token is a type of fraud, as well as U.S. President Donald Trump’s ban on purchasing it in the U.S. 

Given the Venezuelan government’s history of not delivering on promises related to the Petro, Cointelegraph advises readers to approach Ramírez’s announcement with skepticism. 

U.S. Treasury Secretary Steven Mnuchin, who has recently spoken out against Bitcoin (BTC) and other cryptocurrencies, delivered the following remarks at  a G-20 meeting in Buenos Aires:

“President Maduro decimated the Venezuelan economy and spurred a humanitarian crisis. Instead of correcting course to avoid further catastrophe, the Maduro regime is attempting to circumvent sanctions through the Petro digital currency — a ploy that Venezuela’s democratically-elected National Assembly has denounced and Treasury has cautioned U.S. persons to avoid.”


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A Venezuelan crypto official encourages citizens to use a Petro-friendly remittances platform

Venezuelan Petro Against US Sanctions: History and Use of the Crypto

Venezuelan Petro Against US Sanctions: History and Use of the Crypto

Venezuelan P2P trade continues to flourish despite government efforts to drive adoption of the country’s controversial oil-backed cryptocurrency

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For the entirety of cryptocurrency’s short history, Venezuela has been seen to be among the most striking example of the need for the utility. The South American country has hosted escalating political tension for years, as skyrocketing hyperinflation, electricity blackouts and shortages of vital food and medicine intensified popular discontent.

Venezuelan trade volume dominates P2P markets

Venezuelan peer-to-peer (P2P) markets have long been a leader in terms of volume, in part owing to widespread geo-blocking that targets Venezuelan citizens on the part of cryptocurrency exchanges. Recently, Binance announced that as of July 1, 2019, the residents of Venezuela and 28 other countries will be restricted from accessing Binance’s decentralized exchange platform.

Venezuelan trade has consistently comprised the second-largest market on P2P Bitcoin marketplace Localbitcoins, trailing only behind Russia. During the week of July 13, 2019, approximately 5,012 BTC changed hands — equating to 49,248,298,468 Venezuelan bolivar (approximately $5 million).

LocalBitcoins Volume in Venezuela

Origins of Venezuela’s economic crisis

Following former President Hugo Chavez’s death in March 2013, Venezuela’s current president, Nicolas Maduro, was elected to power in April 2013. The Democratic Unity Roundtable, an electoral coalition of Venezuelan political parties opposed to the policies of the United Socialist Party of Venezuela, claimed that the election was fraudulent. However, the Supreme Court of Venezuela ruled Maduro to be the country’s legitimate president. During 2013, Venezuela’s annual inflation reached a 16-year-high of 56.2%. Since Maduro’s election, hundreds of thousands of Venezuelans have taken to the streets to protest corruption, hyperinflation, a scarcity of basic goods and violent coercion. 

Oil prices slump during 2014

From the start of 2014, the price of oil dropped roughly 60% from more than $100 per barrel. With crude oil equating to approximately 80% of Venezuelan exports, the plummeting price of oil drove the Venezuelan economy to enter a recession. 2015 saw Maduro’s United Socialist Party of Venezuela suffer defeat during parliamentary elections. However, Maduro vowed to “stop by hook or by crook the opposition coming to power, whatever the costs, in any way,” and replaced the country’s entire Supreme Court the following day. The following month, President Maduro consolidated executive control over all three branches of government amid decreeing a national “economic emergency,” effectively preventing the National Assembly from legislating.

During 2015, Venezuela experienced the highest rate of inflation in the world, with inflation exceeding 100% for the first time in the country’s history. The following year saw annual inflation reach 274%, while the price of consumer goods in Venezuela rose by 800%. A study published by Diario Las Americas approximated that more than 15% of Venezuelans were then regularly consuming food waste that had been discarded by commercial establishments.

During 2017, Venezuelan inflation was estimated to have skyrocketed to 2,000% annually. Victor Torres, a chauffeur living in the Venezuelan city of Maracaibo, articulated the ordeal of attempting to make basic purchases under conditions of extreme hyperinflation to The Telegraph, stating: “The other day I went to buy a banana. In the morning it cost 1,900 bolivares and in the afternoon, 3,000. You can’t live this way. I am disappointed with politicians.“

Petro implementation timeline

Venezuelan inflation climbs to 130,000% in 2019

Following Venezuela’s May 2018 election, Maduro claimed to have won 67.8% of the ballot. However, the result was challenged by the governments of Argentina, Chile, Colombia, Brazil, Canada, Germany, France and the United States — which described the election as failing to guarantee a free, fair and transparent democratic process, and subsequently moved to recognize Juan Guaido of the Popular Will party as the legitimate president of Venezuela. During October 2018, Venezuelan annual inflation was estimated to have reached 130,060%.

Since 2015, the United Nations estimates that 4 million Venezuelans have fled the country — roughly 12.5% of Venezuela’s current population.

Since the establishment of the Corruption Perceptions Index in 1995, Venezuela has been ranked among the world’s most corrupt regimes. In 2010, the index ranked Venezuela as the 164th-least transparent government of 178 nations, with Venezuela ranking 166th of 178 countries in 2016, and 168th of 180 nations in 2018. The World Justice Project also ranked Venezuela 99th out of 99 nations according to its 2014 Rule of Law Index, with the index currently ranking Venezuela 126th of 126 nations.

Economic sanctions

In addition to struggling to persevere the degrading economy and rampant political corruption, Venezuelan citizens also bear the brunt of sanctions imposed on the Latin American nation by the U.S. and other countries.

At the start of 2019, Alfred de Zayas, the first U.N. rapporteur to visit Venezuela for 21 years, described U.S.-imposed sanctions as comprising “economic warfare.” The special rapporteur recommended that the International Criminal Court investigate the sanctions maintained by the U.S. as potential crimes against humanity under Article 7 of the Rome Statute, arguing that the sanctions are illegal due to their lack of endorsement from the U.N. Security Council. He stated:

“Modern-day economic sanctions and blockades are comparable with medieval sieges of towns. Twenty-first-century sanctions attempt to bring not just a town, but sovereign countries to their knees.”

Zayas’ findings were based on his late-2017 mission to the country that saw the rapporteur interview government ministers, members of the country’s opposing parties, nongovernmental organizations (NGOs) operating in Venezuela, and local academics, activists and church officials. The criticisms of the economic sanctions have been echoed by numerous NGOs, with the president of Fundalatin, Eugenia Russian, stating:

“We consider that one of the fundamental causes of the economic crisis in the country is the effect that the unilateral coercive sanctions that are applied in the economy, especially by the government of the United States.”

President Donald Trump has recently threatened to intensify the sanctions currently imposed on Venezuela, stating that he will “continue to use the full weight of United States economic and diplomatic power to press for the restoration of Venezuelan democracy” while announcing support for the recognition of Guaido as the country’s legitimate leader in January.

Petro

In a bid to circumvent the economic sanctions imposed on Venezuela, Nicolas Maduro announced plans to launch a cryptocurrency backed by the nation’s oil, gasoline, gold and diamond reserves during December 2017. The president claimed that the digital currency, named Petro (PTR), would allow the country to access “new forms of international financing.”

At the start of January 2018, President Maduro ordered the issuance of the first 100 million Petros, announcing that each Petro will be pegged to the value of one barrel of Venezuelan oil — equating the cryptocurrency’s capitalization to roughly $5.9 billion. Several days later, the opposition-run National Assembly criticized Petro, calling the digital currency “null and void.” Parliamentary Deputy Jorge Millan described Petro as fraudulent, stating: “This is not a cryptocurrency, this is a forward sale of Venezuelan oil. It is tailor-made for corruption.” He went on:

“We find ourselves before a new kind of fraud, disguised as a solution the (financial) crisis. This incompetent government wants to compensate for lack of oil production with these virtual barrels.”

At the end of January 2018, Maduro announced that cryptocurrency mining was a “perfectly legal” activity. The president also announced that citizens targeted during the prior year’s police crackdown on mining operations would have any related charges dismissed. On Jan. 30, 2018, Maduro’s administration published the white paper for the cryptocurrency.

On Feb. 8, 2018, Jose Vielma Mora, Venezuela’s minister of foreign trade and international investment, told the state-sponsored news outlet TeleSur that foreign investors would be willing to conduct trade in exchange for Petro, claiming that Poland, Denmark, Honduras, Norway, Canada and Vietnam were among the trading partners preparing to accept the controversial cryptocurrency as a means of payment.

Venezuela launched the presale for Petro on Feb. 20, 2018. 82.4 million Petros were made available in exchange for select fiat currencies and cryptocurrencies. Three days later, Venezuelan media claimed that the presale had raised $1 billion. On Feb. 24, the Venezuelan government launched a free cryptocurrency training course aimed at improving digital currency literacy for ordinary citizens.

Trump administration bans U.S. citizens from purchasing Petro

On March 19, President Trump barred American citizens from purchasing Petro by executive order. At a G-20 meeting in Buenos Aires, U.S. Treasury Secretary Steven Mnuchin, stated:

“President Maduro decimated the Venezuelan economy and spurred a humanitarian crisis. Instead of correcting course to avoid further catastrophe, the Maduro regime is attempting to circumvent sanctions through the Petro digital currency — a ploy that Venezuela’s democratically-elected National Assembly has denounced and Treasury has cautioned U.S. persons to avoid.”

The U.S. Treasury Department described Petro as comprising an “attempt to prop up the Maduro regime, while further looting the resources of the Venezuelan people.” On March 27, Bitfinex announced that it would not support Petro in light of the U.S. sanctions against the cryptocurrency.

Venezuela promotes Petro adoption

During 2018, the Venezuelan government conceived several initiatives designed to bolster the adoption and perceived utility of Petro. In May 2018, Maduro announced the launch of a Petro-funded crypto bank that would support project proposals from the country’s youth. During July 2018, The Venezuelan minister of habitat and housing, Ildemaro Villarroel, announced a plan to fund the construction of houses for homeless citizens using the cryptocurrency. The following month, the president also announced that Petro would be used as a general unit of account in Venezuela, stating:

“As of next Monday, Venezuela will have a second accounting unit based on the price, the value of the Petro. It will be a second accounting unit of the Republic and will begin operations as a mandatory accounting unit of our PDVSA oil industry.”

Despite the announcements, during August 2018, Reuters reported that there was little indication of Petro’s presence in the oil-rich Venezuelan town of Atapirire. Despite comprising the sole town located in a region that the Venezuelan government estimates is home to 5 billion barrels of oil, Atapirire resident, Igdalia Diaz, told Reuters, “There is no sign of that Petro here.”

During the same month, the country’s former oil minister, Rafael Ramirez, estimated that Venezuela’s state-owned oil company did not possess the roughly $20 billion that he believed would be required in order to tap the nation’s oil reserves. Ramirez stated, “The Petro is being set at an arbitrary value, which only exists in the government’s imagination.”

Accusations of plagiarism

Ethereum Core developer Joey Zhou published a tweet on Oct. 2, 2018, asserting that the 11th page of Petro’s white paper contained an image plagiarized from the Github repository of Dash. Petro also opted to use the same X11 proof-of-work (PoW) mining algorithm as Dash. Zhou described Petro as comprising a “blatant Dash clone.”

On Oct. 5, 2018, Venezuelan Vice President Delcy Rodriguez announced that the fees for all passport applications would be exclusively payable in the form of Petro from Oct. 8 onward. The announcement was accompanied by a hike in the cost of passport applications, with new applications incurring a fee of 2 PTR and passport extensions priced at 1 PTR.

Venezuela launches Petro offering

Venezuela’s Ministry of Economy announced that Petro had been made available for purchase on Oct. 29, 2018. In an infographic published on Twitter, the token could be purchased from the Venezuelan Treasury from either the coin’s official website or from six government-authorized cryptocurrency exchanges: Bancar, Afx Trae, Cave Blockchain, Amberes Coin, Cryptia and Criptolago. The official Twitter account of the Petro indicated that investors were able to purchase the cryptocurrency using U.S. dollars, euros and Chinese yuan, in addition to Bitcoin, Litecoin, Ether and Dash. 

During November 2018, the National Assembly of Venezuela approved a bill containing new cryptocurrency regulation. The bill sought to legitimate Petro as a unit of commercial exchange within the country. The same month saw the National Assembly pass amendments to Anti-Money Laundering (AML) laws to pave the way for Venezuelan cryptocurrency exchanges to conduct foreign exchange operations using Petro.

Venezuelan government official Andres Eloy Mendez described the amendments as being intended to combat the “financial and commercial blockade” being maintained by the U.S. government, adding that the cryptocurrency would allow the evasion of sanctions and facilitate new transnational business relationships.

Venezuela raises bolivar-value of Petro

On Nov. 30, 2018, President Maduro announced that the fiat-value of Petro had been raised from 3,600 bolivars to 9,000 bolivars amid extreme inflation, alongside ordering an increase in the monthly minimum wage by 150% — the sixth wage hike of that year.

During December 2018, the Venezuelan government moved to automatically convert its pensioners’ monthly bonuses into Petro. According to Caracas Chronicles, pensioners’ government payouts were withdrawn and converted into Petro after initially being deposited into fiat accounts hosted by government web portal patria.org.ve on Dec. 7, 2018. 

On Dec. 28, 2018, Venezuela filed a consultation request with the World Trade Organization (WTO) making a complaint regarding the economic sanctions imposed by the U.S., describing five examples of “coercive trade-restrictive measures” that were imposed on the Bolivarian Republic of Venezuela. 

With regard to “transactions in Venezuelan digital currency,” the complaint alleged that U.S. sanctions violated the WTO’s General Agreement on Trade in Services by subjecting Venezuelan financial service suppliers to conditions “less favourable than that accorded to like services and service suppliers of WTO Member States not subject to the measures,” as well as conditions inferior to the treatment of “like domestic financial services and service suppliers.”

In February 2019, the Venezuelan government published a decree imposing regulations on cryptocurrency remittances within the country. The document revealed that the National Superintendency of Crypto Assets and Related Activities (SUNACRIP) would be responsible for taxation pertaining to cryptocurrency transactions. 

The new regulations established a monthly limit on cryptocurrency regulations and imposed a maximum fee of 15% on cryptocurrency transfers alongside a minimum fee of roughly $0.28. Remittances in the form of Petro were capped at 10 PTR per month (equating to approximately $600), however, individuals and entities will be permitted to conduct up to 50 Petros worth of monthly trade with SUNACRIP approval.

Petro-active

During March 2019, the United States Treasury Department added Moscow-based Evrofinance Mosnarbank to its sanctions list, accusing the financial institution of comprising the “primary international financial institution willing to finance” Petro. The department stated:

“This action demonstrates that the United States will take action against foreign financial institutions that sustain the illegitimate Maduro regime and contribute to the economic collapse and humanitarian crisis plaguing the people of Venezuela.”

In May 2019, Venezuelan U.N. delegate Geneva Jorge Valero stated that Russia and Venezuela were discussing utilities for Petro amid agreements to settle trade using the Russian ruble. On July 4, 2019, President Maduro ordered the country’s leading bank, Banco de Venezuela, to open “Petro desks” and accept PTR at all of its branches.


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Venezuelan P2P trade continues to flourish despite government efforts to drive adoption of the country’s controversial oil-backed cryptocurrency