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Venezuela Petro cryptocurrency banned in the US

Posted: 20 March 2018 10:50 am
Venezuela prepares to issue Petro CF

A hard no to the Petro from the USA, possibly for the benefit of any of its citizens that were thinking of getting involved.

New sanctions come down for Venezuela, as an order from US president Donald Trump prohibiting US purchases of the Venezuela Petro cryptocurrency. He authorised Treasury Secretary Steven Mnuchin to issue any necessary regulations to enforce it, Bloomberg reports.

The Petro was specifically touted as a way of escaping US sanctions, and the ban on US purchases might be a glimpse at the future of sanctions, with Iran, Russia and Turkey also reportedly eyeing the potential of cryptocurrencies, possibly as a means of escaping sanctions.

But the Petro has been fraught with complications and doubts since its launch, and it has steadily kept getting more confusing. It's not entirely clear who's bought any, how much has been bought or whether anything's actually happened with the token yet.

On the one hand, Venezuela president Nicolas Maduro has insisted that the Petro has raised $5 billion from a wide range of buyers. On the other hand, the NEM address that's thought to hold the tokens is still showing them all locked away. As far as anyone knows, those who've purchased Petros have yet to receive any.

The order to ban US Petro purchases is now the latest development in the confusing and disorganised saga of the Petro. Maduro previously announced the launch of a Petro Gold cryptocurrency, backed by gold, to back the oil backed Petro but it's not clear whether anything's actually happening there either.

The Petro is an even more contentious issue inside Veneuzela, with the opposition party labelling it an illegal tool for corruption and a way of mortgaging the country's oil supplies for personal gain.

The future of the Petro has been in limbo since before it was created, and a ban on US Petro purchases probably doesn't do much for its credibility.

"It’s a pretty big blow. Since most cryptocurrencies are not actually backed by anything real, cryptocurrency speculation is based on the greater fool theory – I can buy this at $100 because there is someone who is a bigger idiot who is going to buy it at $200. When you take the U.S. out of that equation, you reduce the interest and potential for that speculation," said Russ Dallen, managing director at Caracas Capital.

Not all venture capitalists agree with that sentiment for cryptocurrency as a whole, but it might be a fair assessment of the Petro's potential.

It might not have been worth buying the Petro even when you could do it legally, Dallen suggests. And now the entire oil slick seems to be one step closer to catching fire.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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