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US Lawmaker Presses Treasury on Venezuela's Petro Sale

Florida senator Bill Nelson has joined the ranks of those hitting out at Venezuela’s recently launched petro token.

In a letter sent to Treasury Secretary Steven Mnuchin on Monday, Nelson said he was “concerned by recent reports” that Venezuela, as well as Russia, are planning to use cryptocurrencies to get past economic sanctions.

Focusing on Venezuela’s president, in particular, he noted that Nicolás Maduro “is responsible for persistent human rights violations, political repression and the jailing of opponents, undermining democratic institutions, corruption, and widespread economic deprivation.”

Nelson continued:

“Maduro’s regime is a criminal one and targeting the money that fuels it is critical – especially as he appears to be increasingly desperate for financing. Cryptocurrencies potentially offer Maduro and other bad actors the means to avoid banks and other intermediaries to hide their financial activity.”

The senator concluded his letter with several questions for Mnuchin, asking what the Treasury Department is already doing to prevent Maduro from raising funds via the petro, what it will do to crack down on exchanges which are not following sanctions and whether the department needs new authority to fight attempts to avoid sanctions, among others.

With the letter, he joins senators Bob Menendez and Marco Rubio in requesting that Mnuchin limit the use of the petro. In late January the two co-wrote a similar letter asking how the department could crack down on Venezuela’s attempt to bypass sanctions. Menendez’s office later said he was planning to follow-up with the department.

Venezuela debuted the controversial petro last month, launching a pre-sale near the end of February.

The oil-backed token is intended to act as legal tender within the country, by order of the president, though it cannot be exchanged for the existing Venezuelan bolivar. President Maduro has claimed to have raised as much as $5 billion through the pre-sale, but has not released any evidence to support this.

Bill Nelson image via Shawn P. Eklund for the U.S. Navy/Wikimedia Commons

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US Senators Blast Venezuela's Oil-Backed Cryptocurrency Plan

U.S. Senators Marco Rubio (R.-Fl) and Robert Menendez (D.-NJ) have denounced Venezuela’s planned cryptocurrency in a new letter.

In an open letter addressed to U.S. Treasury Secretary Steven Mnuchin, Rubio and Menendez asked how the Treasury Department was monitoring Venezuela’s plan to create its own oil-backed cryptocurrency, which the country’s president, Nicolas Maduro, has said will help the country avoid global financial sanctions.

The two senators want to know how the department will move to prevent the country from using the “petro” to bypass American sanctions. The letter noted that Venezuela has spent several years in an economic crisis, resulting in a lack of access to basic resources for most citizens.

Rubio and Menendez wrote:

“We have serious doubts about whether Venezuela has the capacity to launch a cryptocurrency, but regardless, it is imperative that the U.S. Treasury Department is equipped with tools and enforcement mechanisms to combat the use of cryptocurrency to evade U.S. sanctions in general, and in this case in particular.”

The project has sparked its share of controversy even within its home country, with the nation’s Congress denouncing it as illegal and saying the legislature needs to vote on the token’s creation.

Earlier this month, an alleged white paper for the coin was shared on social media, but the central government labeled it as false, saying that Maduro would announce the token’s white paper at a later date.

U.S. Congress image via Shutterstock

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