President Trump Signs Executive Order to Ban Venezuela’s Petro Cryptocurrency

Less than two months after Venezuela issued a white paper on its proposed cryptocurrency, Petro, President Trump has signed an executive order that bans the controversial cryptocurrency. As previously reported, Petro’s background dates back to “proposals for global financial and monetary coordination prior to the hegemony of the US dollar, which resurfaced after the financial crisis of the late 1990s.” The Petro is expected to be a sovereign crypto asset backed by oil assets and issued by the Venezuelan State led by President Nicolás Maduro. The Petro white paper stated:

“The Venezuelan population will have at its reach a technology that will allow them having a valuable reserve and robust means of payment to stimulate savings and contribute to the country’s development. Petro will be an instrument for Venezuela’s economic stability and financial independence, coupled with an ambitious and global vision for the creation of a freer, more balanced and fairer international financial system.”

In the executive order, President Trump stated:

I, DONALD J. TRUMP, President of the United States of America, in order to take additional steps with respect to the national emergency declared in Executive Order 13692 of March 8, 2015, and relied upon for additional steps taken in Executive Order 13808 of August 24, 2017, and in light of recent actions taken by the Maduro regime to attempt to circumvent U.S. sanctions by issuing a digital currency in a process that Venezuela’s democratically elected National Assembly has denounced as unlawful.”

The orders are listed below:

Section 1.

  • 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 prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the effective date of this order.

Section 2.

  • Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.
  • Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.

Section 3.  For the purposes of this order:

  • The term “person” means an individual or entity;
  • The term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;
  • The term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches of such entities), or any person within the United States; and
  • The term “Government of Venezuela” means the Government of Venezuela, any political subdivision, agency, or instrumentality thereof, including the Central Bank of Venezuela and Petroleos de Venezuela, S.A. (PdVSA), and any person owned or controlled by, or acting for or on behalf of, the Government of Venezuela.

Section 4.

The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including promulgating rules and regulations and to employ all powers granted to the President by IEEPA as may be necessary to implement this order.  The Secretary of the Treasury may, consistent with applicable law, redelegate any of these functions to other officers and executive departments and agencies of the United States Government.  All agencies of the United States Government shall take all appropriate measures within their authority to carry out the provisions of this order.

Section 5.

For those persons whose property and interests in property are affected by this order who might have a constitutional presence in the United States, the President finds that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures taken pursuant to this order would render those measures ineffectual. The President, therefore, determined that for these measures to be effective in addressing the national emergency declared in Executive Order 13692, there need be no prior notice given for implementation of this order.

Section 6.

This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

This order became effective at 12:15 p.m. EST on March 19, 2018.

 

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