Tether has pledged to freeze assets after Venezuela looks to crypto to bypass oil sanctions.

USDT issuer Tether says it will block addresses linked to sanctioned entities following reports that Venezuela's state oil company is using the stablecoin to circumvent sanctions.

A Tether spokesperson told Cointelegraph that the company remains committed to ending payments related to Office of Foreign Assets Control (OFAC) sanctions:

“Teter complies with OFAC's SDN list and is committed to working to ensure that sanctioned addresses are promptly closed.”

This happened after an exclusive report by Reuters revealed that the Venezuelan government has been using the funds to facilitate the export of crude oil and fuel by the oil company PDVSA. The country is facing a new oil embargo that will be reimposed by the United States.

According to the report, the US Treasury Department will require PDVSA customers and suppliers to cancel transactions by May 31 because Venezuela has not implemented electoral reforms.

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The report, which cited unnamed sources, said the reimposed sanctions would make it more difficult for Venezuela to increase its oil production and exports.

Sources say PDVSA is moving its fuel sales to Tether (USDT) to avoid funds being blocked in foreign bank accounts when new sanctions are imposed.

In the year In 2023, reports linked cryptocurrency payments to PDVSA's corruption scandal, including the discovery of $21 billion in undisclosed receipts for oil exports.

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Reuters sources PDVSA in 2015. They say it has reworked the oil deal into a contract model that requires upfront payment in USDT for export shipments in 2024. The report also points out that the Venezuelan state-run oil company is asking new customers who want to carry out oil transactions to hold cryptocurrency in a digital wallet.

In the year Following a six-month license from the US in October 2023, it is understood that companies wishing to continue doing business with PDVSA will have to go to intermediaries to fulfill the cryptocurrency payment requirements.

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