Taking Additional Steps to Address the Situation in Venezuela

Mar 21, 2018

Summary

Bans all transactions by U.S. persons related to any digital currency issued by the Venezuelan government to stop them from avoiding U.S. sanctions.

What problem does this solve?

The government of Venezuela created a digital currency to get around existing U.S. financial punishments. This order closes that loophole by forbidding any U.S. person from buying, selling, or dealing with this new digital money.

What does this order do?

Prohibits transactions with Venezuelan digital currency

Forbids any U.S. person or anyone within the U.S. from all dealings, including buying or financing, any digital currency or token issued by the Government of Venezuela on or after January 9, 2018.

Bans actions to avoid the order

Makes it illegal to evade, avoid, or attempt to violate the prohibitions set forth in the order. It also prohibits any conspiracy to violate the order.

Defines 'Government of Venezuela' broadly

Specifies that the 'Government of Venezuela' includes its agencies, the Central Bank of Venezuela, the state oil company PdVSA, and any person or company acting on their behalf.

Authorizes the Secretary of the Treasury to implement the order

Gives the Treasury Secretary, in consultation with the Secretary of State, the power to create rules and use all powers granted by the International Emergency Economic Powers Act (IEEPA) to enforce this order.

Who does this affect?

Government of Venezuela
U.S. citizens and residents
U.S. financial institutions and cryptocurrency exchanges

What is the real world impact?

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Increases economic pressure on the Maduro regime

Blocks the Venezuelan government from using a new digital currency to bypass existing U.S. financial sanctions. This action aims to further isolate the regime and limit its access to funds.

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Sets a precedent for digital currency sanctions

Represents one of the first times a country has been sanctioned for issuing a national cryptocurrency. This could serve as a model for future sanctions involving digital assets used to avoid international rules.

When does this start?

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