Blockchain Legal Resource

On October 2, 2018, Venezuelan President Nicolas Maduro appeared on national television and announced the official launch of the Venezuelan Petro cryptocurrency. First announced in December 2017, and purportedly backed by the country’s oil and mineral reserves, the Petro is intended to supplement Venezuela’s national currency, the bolívar, which has depreciated at an exorbitant rate in the past year. The International Monetary Fund has predicted that inflation in the country will reach 1 million percent.

While the official website and wallet for the Petro appear to have launched and be fully operational, and it appears to be presently trading in various cryptocurrency exchanges, United States persons (including even foreigners temporarily visiting the United States) should be extremely wary of trading or investing in the Petro.

On March 19, 2018 the Trump administration issued an executive order entitled “Taking Additional Steps to Address the Situation in Venezuela,” which prohibits all transactions related to the provision of financing for, or other dealings in, Venezuelan digital currencies, digital coins and digital tokens by United States persons or within the United States.

It is important to note that this restriction extends to not only United States persons such as United States citizens, permanent residents or legal entities formed under the jurisdiction of a United States jurisdiction, but also to anyone physically present and carrying out such activities within the United States. Thus, a foreign national that trades in the Petro while on vacation in the United States, for example, could be sanctioned by the Office of Foreign Assets Control of the U.S. Department of the Treasury for violating the prohibitions set forth in this executive order.