Trump Takes Aim at Venezuela’s Cryptocurrency

Maduro regime recently issued a bitcoin-equivalent to flout U.S. sanctions

Venezuelan President Nicolas Maduro

Venezuelan President Nicolas Maduro / Getty Images

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President Donald Trump tightened U.S. sanctions against the Venezuelan government on Monday by prohibiting any U.S. financial transactions involving Venezuela's new digital cryptocurrency, the Petro.

Trump's executive order preventing any U.S. involvement in Caracas's new digital currency applies to U.S. citizens or anyone operating within the United States using the currency on or after Jan. 9. He authorized Treasury Secretary Steven Mnuchin to issue any necessary rules and regulations to implement the order.

Venezuelan President Nicolas Maduro has tried to prop up the country's failing economy and skirt U.S. sanctions by launching the Bitcoin-like currency. The government has argued that the currency is backed by Venezuela's oil reserves, but U.S. officials dispute the claim. 

The Treasury Department also announced specific sanctions on four additional current and former Venezuela government officials associated with government "mismanagement and corruption."

"President Maduro decimated the Venezuelan economy and spurred a humanitarian crisis," Mnuchin said in a statement. "Instead of correcting course to avoid further catastrophe, the Maduro regime is attempting to circumvent sanctions through the Petro digital policy—a ploy that Venezuela's democratically elected National Assembly has denounced, and Treasury has cautioned U.S. persons to avoid."

The newly sanctioned officials are: Americo Alex Mata Garcia, an alternate director on the board of directors of the National Bank of Housing and Habitat; William Antonio Contreras, the head of the agency responsible for imposing government price controls; Nelson Reinaldo Lepaje Salazar, the head of the National Treasury; and Carlos Alberto Rotondaro Cova, the former president of the board of directors for the government agency tasked with providing patients with drugs for chronic conditions.

Mnuchin met with other finance ministers at the G20 conference in Buenos Aires Monday and discussed the deepening crisis in Venezuela.

"We urge Maduro to distribute humanitarian aid and stop blocking much-needed foreign assistance to the suffering people of Venezuela, and we again call upon the Venezuelan military to respect and uphold the Constitution."

The new action marks the fourth time the U.S. government has sanctioned Venezuelan officials in recent months. The White House recently barred U.S. banks from purchasing new Venezuelan debt, one of the biggest blows to Venezuela's economy.

It comes as the South American nation's political crisis continues to result in shortages of food, medicine, and other basic necessities across the country.

The Trump administration also has been weighing sanctions against Venezuela's important oil sector before the nation's presidential election on May 20.

Doing so could impact civilian Venezuelans, as well as the government, and could have a destabilizing impact on the entire economy in the Caribbean, not to mention a harmful effect on the U.S. economy as well, a U.S. official told reporters Monday.

"We are considering all options, including oil-sector sanction options," the official said. "[Oil sanctions] is a fairly strong step forward and would have ramifications not just for the government in Caracas, but also the people of Venezuela, the stability and economy of the Caribbean and most importantly, the U.S. economy."

Sen. Marco Rubio (R., Fla.) applauded Monday's action against Venezuela.

"I commend the president and his administration for continuing to take action against efforts by the illegitimate Maduro regime to exploit illicit financial lifelines, and encourage additional sanctions in the weeks to come," he said in a statement.

Trump's actions against Caracas's cryptocurrency come after Rubio and several other U.S. lawmakers warned that Maduro was trying to use the Petro to circumvent U.S. sanctions.

Rubio and Robert Menendez (D., N.J.) raised concerns in January that the Maduro regime's use of the Petro would be watched by other U.S. adversaries, such as Russia and North Korea.

"To what extent is the Department monitoring possible nefarious uses of other cryptocurrencies by Venezuela, Russia, and North Korea?" they wrote in a letter.

Susan Crabtree

Susan Crabtree   Email Susan | Full Bio | RSS
Susan Crabtree is a senior writer for the Washington Free Beacon. She is a veteran Washington reporter who has covered the White House and Congress over the past two decades. She has written for the Washington Examiner, the Washington Times, the Hill newspaper, Roll Call, and Congressional Quarterly.

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