Russian Bank sanctioned by US Treasury over links to Venezuela’s Petro

A Moscow-based bank has been sanctioned by the U.S. Department of Treasury, for its role in the financing of Venezuela’s Petro Cryptocurrency.

The announcement was made by the Treasury on Monday. Evrofinance Mosnarbank, jointly owned by Russian and Venezuelan state-owned firms, was designated to the Specially Designated Nationals List by the Office of Foreign Assets Control (OFAC), being the ‘primary’ international bank that helped finance Venezuelan President, Nicolas Maduro’s Petro project.

“Early investors in the Petro were invited to buy the cryptocurrency by wiring funds to a Venezuelan government account at Evrofinance. Evrofinance’s involvement in the Petro demonstrated Maduro’s hope that the Petro would allow Venezuela to circumvent U.S. financial sanctions.” the Treasury said.

The firm has been on the U.S. sanctions list since January. The Treasury added that Evrofinance supported Venezuelan state-owned oil company, Petroleos de Venezuela S.A. (PdVSA).

Treasury Secretary Steven T. Mnuchin said, “The United States will take action against foreign financial institutions that sustain the illegitimate Maduro regime and contribute to the economic collapse and humanitarian crisis plaguing the people of Venezuela.”

A statement was issued by Evrofinance on its website claiming that the bank ‘continues to operate in a stable manner’, adding that it will ‘unconditionally fulfill all its obligations . to customer and partners in full.’

“All property and interests in property of this entity, and of any entities that are owned, directly or indirectly, 50% or more by this entity, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.”, the Treasure said.

Venezuela has been in a state of hyperinflation since November 2016, with the Bolivar being subject to an inflation rate of 80,000 % per annum. With no sign of recovery, the economy has been in a deep recession for 5 years now.

In August 2018, Nicolas Maduro tried to end hyperinflation in Venezuela by devaluing the Bolivar by 95% and pegging it to the Petro – the state-issued oil-backed cryptocurrency.

This article was sourced from CoinDesk.

Want to share your thoughts on this?