Tether Takes Stand Against Venezuelan Oil Sanctions with Wallet Freezing
In a bold move to uphold US sanctions on Venezuelan oil exports, Tether, the issuer of the stablecoin USDT, has announced its decision to freeze any wallets using its currency to bypass these restrictions. This comes in response to Venezuela’s state-run oil company, PDVSA, increasingly turning to Tether to evade the sanctions imposed due to concerns over the country’s political actions and upcoming election.
PDVSA’s adoption of USDT last year was a strategic move to mitigate the risks associated with cash transactions, which are susceptible to being seized by the US in international bank accounts. The company has also been utilizing intermediaries to obscure the movement of funds, complicating tracking efforts by regulators.
A spokesperson from Tether reiterated the company’s commitment to complying with the US Treasury Department’s Office of Foreign Assets Control (OFAC) regulations, stating, “Tether respects the OFAC SDN list and is committed to working to ensure sanction addresses are frozen promptly.”
The broader context of OFAC’s increased scrutiny on the crypto sector is evident, with recent actions including the freezing of an Ethereum wallet linked to the Mexican Sinaloa Cartel for money laundering and the sanctioning of over-the-counter crypto traders aiding North Korea’s Lazarus Group in crypto heists.
By aligning its operations with OFAC’s standards, Tether is solidifying its position in the financial ecosystem and addressing the challenges posed by the use of crypto in sanctioned activities. This move not only demonstrates Tether’s commitment to regulatory compliance but also highlights the evolving landscape of cryptocurrency regulations in response to illicit activities.
