The symbol of Venezuela’s new cryptocurrency, the petro

Venezuela is planning to launch a new digital currency called the “petro,” which officials in the South American country have billed as a way to ameliorate a dire economic situation.  But experts say the petro could be used for more sinister purposes, including corruption and money laundering.

Venezuelan President Nicolás Maduro first announced plans for the petro in December 2017.  It is intended to serve as an alternative to Venezuela’s troubled hard currency, the bolivar, whose value has fallen dramatically in recent years.  The bolivar has become so worthless that criminals are using the paper notes to counterfeit other currencies.

Last month, the Venezuelan government claimed that a pre-sale of the petro — whose value is supposedly backed primarily by the nation’s vast oil reserves — generated significant interest from investors, allegedly raising some $5 billion in purchase offers.

However, many of the government’s claims about the digital currency have been called into question, and many technical details about it remain unclear or in flux.

The opaque nature of the project has raised suspicions that the petro could be used to facilitate corruption by Venezuelan elites and to launder the proceeds of their criminal activities.

Building a ‘War Chest’

Michael McCarthy, a research fellow at American University’s Center for Latin American and Latino Studies, pointed out that the rollout of the petro comes against the backdrop of economic and political developments that have affected the dynamics of corruption in Venezuela.

“I view this in the broader context of the regime going through a liquidity crunch, and in addition to that liquidity crunch is the immediate context of an election, in which the government is always interested in going to its donors and asking for contributions for financing to build up a war chest,” McCarthy said.

Venezuela saw much of its access to US dollars cut off in August 2017, when the United States issued a new round of sanctions against the country.  The lack of access to foreign currency has impacted Venezuela’s ability to import basic goods like food and medicine, exacerbating longstanding problems with scarcities.

Shortages of essential products have been a major source of discontent for the Venezuelan public, and the Maduro administration may be looking to the petro as a potential source of a quick influx of cash that could help temporarily alleviate those problems ahead of an upcoming general election.

“This is a new scam that is meant to provide new opportunities for licit and illicit business.”

Indeed, the petro will be sold through the country’s foreign exchange system, known as DICOM, suggesting the government is seeking to raise dollars, euros and other currencies that could be used to purchase imports.  Moreover, the government is currently offering the petro at a discounted rate that will expire on May 20, the day of the elections.

Scarcities of basic goods in Venezuela have spawned black markets involving officials and other elites.  These illicit networks could be used to distribute imports purchased with the potential windfall from investment in the petro.

“This is a new scam that is meant to provide new opportunities for licit and illicit business,” McCarthy said, noting that the Maduro administration in January ended the subsidized currency exchange rate known as DIPRO, which had been used by connected elites to obtain subsidized dollars that could be sold for huge profits on the black market.

“They needed to offer regime insiders other sources of getting cash, or finding ways to make a quick buck,” McCarthy said.

Criminal Applications

Katlyn Woods, an analyst with the US Department of Homeland Security (DHS), told InSight Crime that she also believes the petro could be used for shady dealings, including money laundering.

“I feel like it’s definitely geared toward more corruption and criminal activity, and there’s going to be some black market for it,” she said.

The DHS analyst pointed in particular to the possibility that the petro could be used for trade-based money laundering, whereby dirty money is moved around the world by manipulating the prices of imported or exported goods.

The use of a digital currency like the petro for such operations, Woods said, would add “another layer to an already layered money laundering concept,” making the laundering difficult for authorities to detect.

SEE ALSO: Coverage of Money Laundering

In addition, there may be ways of “tumbling” the petro — repeatedly trading it for other digital currencies in a way that obscures the identity of the true owner of the assets.

There are currently more than 1,500 digital currencies being sold on more than 9,000 exchanges, not all of which are regulated.  Exchanging petros for other digital currencies in these markets may provide an avenue for money laundering.

However, Woods pointed out that there are significant questions about whether or not digital currency markets will actually accept the petro, particularly since the US government has warned that buying petros could be construed as offering credit to the Venezuelan government, which would violate US sanctions against the country.

Confidence Game

Perhaps the most significant obstacle to attracting sustained investment in the petro is the international reputation of Venezuela’s government — which includes defaulting on debts as well as serious accusations of corruption and violent political repression.

“I don’t see people wanting to invest in Venezuela unless there is some sort of incentive there,” said Woods.  “The only way for them to draw people in is they have to make it attractive somehow.”

One way to attract international interest, Woods suggested, would be to offer a “citizenship by investment” program, as some Caribbean countries have begun to do.  The idea would be that foreign individuals could essentially purchase Venezuelan citizenship by buying a certain amount of petros.

However, no such program currently exists, and given that Venezuelan citizens are fleeing the country en masse, the promise of citizenship in the crisis-wracked nation would likely not be very enticing.

SEE ALSO: Venezuela News and Profiles

Although the petro is supposedly backed by Venezuela’s natural resource reserves, potential buyers are likely to view the currency with skepticism due to a severe decline in the productivity of the oil sector.

“In a country that depends on more than 90 percent of its oil exports and whose oil output is collapsing, who really wants a petro?” Francisco Monaldi, a professor of Latin American energy policy at Rice University, wrote in a recent blog post.

The professor compared the petro to the “infamous” sucre, a virtual currency launched in 2010 that was reportedly used to facilitate various illicit schemes, including sophisticated money laundering operations.

“The petro will be just another way to carry out opaque transactions in which a few will profit at the expense of all Venezuelans,” Monaldi argued.

Uncertain Future

The petro project has not fully taken shape, and the many unanswered questions about the technical details of the digital currency make it difficult to fully assess its potential criminal applications.

However, if the petro does manage to garner significant investment, the results could be problematic; it could be a windfall for the Venezuelan government, many of whose top officials have been accused of criminal activities.

“If they get a bunch of criminal buy-in, people just purchasing a ton to have some sort of value and then it shoots up like bitcoin, that could be dangerous because then you’re going to have Venezuela with millions of dollars of cryptocurrency,” Woods said.

Furthermore, Woods added, local authorities in Latin America often lack the training and expertise necessary to identify and disrupt shady dealings involving digital currencies.

As has been seen in the case of the US “Kingpin List,” this lack of capacity can seriously hinder efforts to combat illicit financial flows — a key concern with the petro.

“It all comes down to general lack of awareness and the training to even do anything,” Woods said.

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, provided that it is attributed to InSight Crime in the byline, with a link to the original at both the top and bottom of the article.  Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

 Venezuela Investigative Unit – 13-3-2018

10 Comentarios

  1. Приветствую Вас друзья, недавно мне в руки попал уникальный сайт на котором Вам необходимо спрогнозировать как будет меняться значение, вверх, или в низ, у Вас всего две кнопки для ответа, благодаря чему если Вы даже будете рандомно нажимать кнопки, Ваши шансы составят 50%, а благодаря специальным методикам которые Вы найдете после регистрации, Ваш баланс будет увеличиваться каждые 60 секунд.
    За одну минуту Вы сможете зарабатывать от одного доллара до бесконечности!
    Это уникальный способ заработка в интернете на сегодняшний день, сервис работает с 2014 года, и всегда вовремя выплачивает заработанные деньги.
    После регистрации Вы получите БОНУСНЫЕ +10 000b на счет, и сможете сами сполна протестировать этот замечательный сервис.

    Попробуйте БЕСПЛАТНО!

  2. Пару минут назад мониторил материалы инет, и вдруг к своему удивлению открыл интересный вебсайт. Вот гляньте: японские клинки . Для моих близких данный ресурс показался весьма полезным. Всего наилучшего!

  3. At FIVE TRADE our customers are our top priority, so we always strive to provide them with first class service.
    At FIVE TRADE, we provide an effective platform for passive profit, which was designed in such a way as to avoid any financial losses for our clients. Many people choose FIVE TRADE, because we are making maximum efforts in order to reduce financial losses for our investors.
    As our customer, you can be sure that your financial future is stable and secure.

    In FIVE TRADE, we have only one goal – to provide our clients with a unique and powerful platform that will help them get the most out of their investment. That’s why we use a platform with a broad infrastructure of our services. Investment services provided by FIVE TRADE are quite competitive and accessible to all segments of the population.


    5.5 %DAILY/31 DAYS/MIN.:5 $/MAX.:5,000 $

    7.7 %DAILY /27 DAYS/MIN.:350 $/MAX.:15,000 $

    9.9 %DAILY /20 DAYS/MIN.:500 $/MAX.:250,000 $

    15.5 %DAILY /15 DAYS/MIN.:1,000 $/MAX.:500,000 $


  4. мню, еще в юности эта фраза встретилась мне в какой-то книжке, и я долго не знал, что принадлежит она Оскару Уайльду. Мысль меня тогда поразила, как все парадоксальное. Потому что мы-то жили согласно поговорке «по одежке встречают, по уму провожают». Здесь все было понятно: как ни наряжайся, а глупость не скроешь. И вообще, дело не во внешности, а в истинных твоих, то есть внутренних достоинствах. Взрослые говорили: главное, какой человек.

    При этом глубоком убеждении мы все же тщательно следили за своей внешностью. В юности человек круглосуточно не сходит с подмостков. Поэтому надо выглядеть. Иначе зачем мама старательно перешивает для меня куртки старшего брата, а я свои непослушные волосы мучаю бриолином? Нет, все имеет отношение именно что к чему-то главному во мне.

    Вернее, во мне все главное, потому что все — мое, и мой внешний вид, голос, жест и есть Я в самом при этом неоспоримом своем проявлении. И ни одна девочка не согласится с песней, что вот, мол, «не родись красивой, а родись счастливой». Каждая хочет быть красивой и знает: это и есть самый короткий путь к счастью. А дурнушки пусть читают на школьных вечерах Заболоцкого про то, что такое красота: «Сосуд она, в котором пустота, или огонь, мерцающий в сосуде». Скучно и нужно только для тех, кому не повезло.

    Фраза пришлась кстати. Вот, например, в книге или в кино сразу видно, когда появляется предатель или бандит. Руки у него потеют, улыбка фальшивая, брюки и рукава куртки короткие, наигранный смех, а взгляд при этом отводит в сторону — обдумывает, как бы лучше обмануть. Остальные герои просто наивные, не сразу замечают. Но мы-то видим сразу. Да и в жизни тот, кто нам неприятен, имеет, как правило, отталкивающие манеры, внешность и даже фамилию. По манере одеваться легко можно определить, кто щелкопер, а кто кинозвезда.

    Но все мы еще при этом и идеалисты, ибо свято убеждены в собственной нравственной непорочности. Искренне верим в то, что говорим, и думаем, что думаем то, что думаем в данную минуту, а хотим того, чего хотят все хорошие люди на земле. Тут и соображать ничего не надо — достаточно посмотреть в глаза, которые ведь никогда не лгут (эта поговорка годилась).

    Боже, с какой наивностью и бесстрашием можно было тогда предложить посмотреть в глаза и как хороша была жизнь в лучезарно-одномерном мире!

    Мальчишка – немец, саксофон трофейный, Но ты, пожалуйста, лети,

  5. Всякий человек должен посещать стоматолога хотя бы 1 раз в полгода. При этом не важно, тревожат ли болезненные симптомы. Необходимо хорошенько вести уход за зубами, чтобы далее не возникло серьёзных проблем. Надо своевременно лечить и диагностировать патологии, и тогда получится максимально длительное время сохранять зубы в прекрасном состоянии. Советуется обратиться в стоматологическую клинику ДентаМед, чтобы заказать услуги опытных специалистов. Стоматология в Казани занимается профилактикой и лечением разных патологий. Здесь если Вам надо протезирование зубов – Вы точно отыщите требуемое!


Dejar respuesta

Por favor escribe tu comentario
Pro favor introduce tu nombre