USDT stablecoin issuer Tether has revealed plans to stop all payments that may be linked to entities that have been sanctioned by the Office of Foreign Assets Control (OFAC). The decision follows after an exclusive Reuters report detailed how Venezuela’s state-run oil company, PDVSA, uses USDT to bypass sanctions.
Per the report, the U.S. has reimposed new oil sanctions on Venezuela. The U.S. Treasury Department has aked PDVSA customers and providers to wind down transactions by May 31 following Venezuela’s failure to implement electoral reforms. This new sanction is poised to make it considerably harder for Venezuela to carry on its oil product and export. That is because companies that want to do business with the South American country will now require U.S. authorizations to do so.
Interestingly, however, Venezuela has reportedly moved its oil sales to Tether in a bid to stop funds from being frozen in foreign bank accounts as the new sanctions begin to take effect.
Tether Vows to Work with OFAC amid Huge Venezuelan Oil Scandal
As the PDVSA continues to facilitate its crude oil and fuel exports regardless, Tether has also signaled its commitment to helping the sanctions to be effective. A Tether spokesperson who spoke on the condition of anonymity issued a part statement:
“Tether respects the OFAC SDN list and is committed to working to ensure sanction addresses are frozen promptly.”
Reports about Venezuela’s escapades with crypto payments first surfaced in 2023. At the time, PDVSA was rocked with a big corruption scandal that led to the discovery of $21 billion of unaccounted receivables for oil exports.
More recently, Reuters again claimed that its sources say that PDVSA has reworked its spot oil deals in 2024. Now, the company allegedly uses a contract model that requires its customers to make a repayment for exported cargo in USDT.
The report also claims that the firm makes it mandatory, even for new customers looking to do business with it, to hold cryptocurrency in a digital wallet.
