Tether is set to freeze wallets using $USDT evading sanctions on oil exports in Venezuela

Stablecoin issuer Tether has said it will freeze wallets using USDT to evade U.S. sanctions on Venezuelan oil exports, after reports that Venezuela’s state oil company, PDVSA, increasingly turned to the dollar-pegged token for crude sales. Reuters and legal analyses report that PDVSA shifted a growing share of spot oil transactions into USDT to reduce the risk of proceeds being frozen in traditional bank accounts following the reimposition of U.S. oil and gas sanctions in April 2024. In this model, buyers were reportedly asked to prepay a portion of cargo values in USDT via digital wallets. In response, Tether stated it would block wallets identified as using USDT to circumvent these sanctions, building on earlier actions in which it froze 41 wallets linked to individuals or entities on the U.S. OFAC Specially Designated Nationals list. This move underscores the growing role of stablecoin issuers as gatekeepers in sanctions enforcement and broader financial compliance, challenging the notion that dollar-pegged crypto can reliably serve as a sanctions-evasion tool at scale. It also highlights the increasing scrutiny on how states under sanctions, including Venezuela, use digital assets to conduct oil trade and the pressure on crypto firms to align with U.S. and international regulatory expectations.

✨ AI-generated background, compiled from web sources — not editorial content.

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