U.S. President Donald Trump signed an executive order banning US citizens from buying and selling Venezuela’s state issued cryptocurrency, the petro.
Trump’s executive order closes the sanctions work-around the Venezuelan government was trying to exploit by issuing their cryptocurrency. The petro, launched in February, is supposedly backed by the countries oil and mineral resources and is intended to supplement the country’s state currency, which is plummeting in value.
The Brookings Institute stated that "it is relatively unsurprising that a dictatorship with little reserve currency...has resorted to deceitful means like introducing the petro...the petro...exists to create foreign currency reserves from thin air."
The United States government clearly recognizes the petro as a scam and as an attempt to bypass the economic restrictions that have been placed on the Venezuelan government.
"All transactions related to, provision of financing for, and other dealings in, by a United States person or within the United States, any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018, are prohibited as of the effective date of this order."
The petro ban comes on the heels of letters from several Senators including Marco Rubio, Bob Menendez, and Bill Nelson, addressed to the Treasury Department questioning how they would stop Venezuela from raising money.
Venezuelan President Maduro claimed that the initial sale of the petro raised approximately 5 billion dollars, but there is no solid evidence to back up this claim.
The executive order issued by President Trump has led some to speculate that this could open a backdoor to cryptocurrency regulation, as it is the first major action taken against a digital currency by the US government.