Say No to Venezuela’s Petro
Coindesk released a report with regard to Venezuela’s new cryptocurrency – Petro. The Petro is reportedly the first ever government-backed cryptocurrency which has been made available to the public. However, investors are being strongly advised to say no to this crypto. Here is a list of reasons why so many are against investing in this cryptocurrency.
Circumventing Economic Sanctions
Venezuelan President Nicolas Maduro is the promoter of this crypto and he clearly advertises it as a way to sidestep US government sanctions which were put in place to curb his government’s mammoth human rights abuses as well as overall corruption.
Poor Rollout of the Petro
Potential investors should have seen the glaring red flags just from the manner in which the Petro has been rolled out. There is a complete lack of clarity about how the Petro is to be obtained, traded or even managed.
Additionally, the white paper for the crypto was rolled out in January where the workings of the token were explained. However, later, a new, revised version was released which talked about a completely different blockchain platform.
The Anti-Money Laundering Guide targeted at Venezuelan crypto-exchanges published by Maduro’s regime contained only a table of contents.
Maduro also claimed that the crypto had garnered $5 billion in its Initial Coin Offering, but refused to give details about the investors. This looks like a blatant lie, since the largest sums to be raised through ICOs hasn’t ever crossed more than a few million dollars – anywhere in the world.
Who’s building the Petro?
There is a complete lack of clarity about who is building the Venezuelan government’s crypto. Initially, a firm by the name of Zeus told Coindesk that they would be doing some of the coding for the blockchain, but later rescinded that statement, saying they were not really formally involved in the project.
Zeus’ background? A Russian startup, registered in Singapore, licensed in Cyprus. The company’s website shows no white paper that could be used to evaluate its claims of developing a blockchain platform for traditional stock trading.
Then, Plus, a Russian Fintech daily, reported that a company called Aero Trading had won the contract to build Petro from the Venezuelan government. The company was reportedly going to build the new token on the NEM blockchain. Aero is also a vague Russian company based out of Uruguay with nothing more than a facing page and a Twitter account that has precisely 3 Tweets that were posted just after the Petro pre-sale.
An investigation by Time Magazine revealed the hand of Russian President Putin’s senior advisors in the supervision of the Petro project – with his approval.
The Venezuelan National Assembly, controlled by the government’s opposition, as already declared the Petro illegal. Trading in Petro has been declared illegal in the US and Americans found to be trading in the crypto outside the country would be in violation of their country’s sanctions.