Venezuelan President Nicolas Maduro announced the success of the country’s new cryptocurrency “petro” recently, claiming the currency has garnered $735 million in pre-sales. However, there was no evidence or proof to show that investors had truly funded the cryptocurrency.
The petro’s valuation is said to be based off of the price of a single barrel of Venezuelan crude oil. However, the country’s fiat currency, the bolivar, cannot be exchanged for petros.
It seems Maduro is trying to utilize cryptocurrency to bypass U.S sanctions. The U.S treasury has issued a warning to the country that its crypto efforts may be a violation of sanctions. Meanwhile, the bolivar continues to dive, approaching record low levels.
Specifically, the U.S has declared that American banks and investors will not be allowed to acquire newly issued Venezuelan debt. This means the nation will not be allowed to borrow from foreign investors in order to release more cryptocurrency. President Maduro has claimed Venezuela is the victim of an economic attack being led by U.S President Trump and other “opposition” leaders.
Several blockchain analysts have suggested the petro is unlikely to be successful, warning investors to be wary of potential digital attacks. In recent months, several high profile exchanges have become victims of large scale hacks. Most notably, Japan’s exchange Coincheck and Italy’s exchange Bitgrail were victims of multi-million-dollar heists.
The Venezuelan government appears to have be trying to calm investor fears of potenial cybersecurity issues with petro. In a buyers manual that was released along with the pre-sale, the government listed ways it would protect investors from hacks and theft.
Despite the claimed success, no evidence was provided of the sales. Maduro did not provide any details about the initial investors and whether they were Venezuelan citizens or foreign governments. There have also been reports that technical issues occurred during the pre-sale. Supposedly, there was a Javascript error that prevented investors from completing their exchanges.
Along with the announcement of the petro’s success, a website was launched which included instructions on how to purchase petros and set up a virtual wallet. The cryptocurrency is expected to go public next month with 100 million tokens to be issued with an estimated valuation of $6 billion.
