According to CoinTelegraph, USDT issuer Tether said it would freeze addresses associated with sanctioned entities in response to reports that Venezuela's state-run oil company used stablecoins to circumvent sanctions.
A Tether spokesperson said the company is committed to blocking payments associated with entities sanctioned by the U.S. Office of Foreign Assets Control (OFAC): "Tether respects the OFAC SDN list and is committed to ensuring these addresses are frozen in a timely manner."
The announcement came after Reuters published an exclusive report that Venezuela’s state-run oil company PDVSA has been using cryptocurrencies to facilitate its crude and fuel exports. The United States has reimposed new oil sanctions on Venezuela.
The report, citing unnamed sources, said the U.S. Treasury Department asked PDVSA's customers and suppliers to clear transactions by May 31. The new sanctions will make it more difficult for Venezuela to increase oil products and exports because companies will need a U.S. license to do business with the South American country.
PDVSA has been shifting its oil sales into Tether to avoid having funds frozen in foreign bank accounts when new sanctions take effect, the sources said.
Reuters’ sources also said that PDVSA has amended its spot crude oil trading contracts for 2024 to require advance payment of export cargoes in USDT. The report also indicated that the Venezuelan state-run oil company requires new customers interested in crude oil trading to hold cryptocurrency wallets.