UPDATED 21:41 EST / SEPTEMBER 29 2019

BLOCKCHAIN

Venezuela may use cryptocurrency to bypass financial sanctions

Venezuela’s central bank is looking into ways to hold bitcoin and Ethereum and use them for financial transactions, according to sources quoted by Bloomberg late last week.

The push is said to be coming from state-run oil company Petroloeos de Venezuela SA, which wants support for cryptocurrencies to pay the company’s suppliers. Socialist Venezuela is subject to numerous international sanctions that limit its ability to use the global financial system, and cryptocurrency is seen as a possible alternative for the troubled country.

This wouldn’t be the first time Venezuela has attempted to switch to cryptocurrency as a way to bypass international sanctions. The country tried to raise $4.9 billion through its “Petro” cryptocurrency in February 2018.

But those efforts were stymied when U.S. President Donald Trump banned Americans from trading in the Petro a month later. The government was still trying to sell Petro’s in July, but its value is virtually nothing outside Venezuela and even its value within the country is questionable as well.

The question not asked by Bloomberg is where the cryptocurrency funds came from. Cryptoglobe said today that the funds have come from laundering bitcoin from seized mining rigs, citing Eduardo, a Venezuelan employee of PurseIO. The crux of the allegations is that the government steals cryptocurrency mining equipment from legitimate users, then uses it to mine for their own profit.

Venezuela’s war on private individuals mining cryptocurrency dates back several years. SurBitcoin was shut down in February 2017. That a corrupt socialist dictatorship would be stealing mining equipment for personal benefit shouldn’t come as a surprise.

Photo: Carlos Díaz/Wikimedia Commons

Since you’re here …

Show your support for our mission with our one-click subscription to our YouTube channel (below). The more subscribers we have, the more YouTube will suggest relevant enterprise and emerging technology content to you. Thanks!

Support our mission:    >>>>>>  SUBSCRIBE NOW >>>>>>  to our YouTube channel.

… We’d also like to tell you about our mission and how you can help us fulfill it. SiliconANGLE Media Inc.’s business model is based on the intrinsic value of the content, not advertising. Unlike many online publications, we don’t have a paywall or run banner advertising, because we want to keep our journalism open, without influence or the need to chase traffic.The journalism, reporting and commentary on SiliconANGLE — along with live, unscripted video from our Silicon Valley studio and globe-trotting video teams at theCUBE — take a lot of hard work, time and money. Keeping the quality high requires the support of sponsors who are aligned with our vision of ad-free journalism content.

If you like the reporting, video interviews and other ad-free content here, please take a moment to check out a sample of the video content supported by our sponsors, tweet your support, and keep coming back to SiliconANGLE.