President Donald Trump has banned U.S. citizens from investing in Venezuela’s recently launched state cryptocurrency.
The order, signed by Trump on Monday, prohibits “all transactions related to, provision of financing for, and other dealings in, by a United States person or within the United States, any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018.”
Treasury Secretary Steven Mnuchin also told reporters that the move would mean socialist dictator Nicolás Maduro “can no longer take advantage of the American financial system to facilitate the wholesale looting of the Venezuelan economy at the expense of the Venezuelan people.”
Regime officials have previously claimed to have raised $735 million during the currency’s pre-sale, although this figure is disputed by cryptoanalysts.
Maduro has argued the initiative will help Venezuela “advance in issues of monetary sovereignty,” mainly by bypassing previous economic sanctions imposed by the Trump administration and other powers such as the European Union, although any form of major investment now appears extremely unlikely.
“It’s a pretty big blow,” Russ Dallen, the managing director at Caracas Capital, told Bloomberg. “Since most cryptocurrencies are not actually backed by anything real, cryptocurrency speculation is based on the greater fool theory – I can buy this at $100 because there is someone who is a bigger idiot who is going to buy it at $200.”
“When you take the U.S. out of that equation, you reduce the interest and potential for that speculation,” he continued.
The currency, backed by Venezuela’s extensive oil reserves, has already been declared illegal by Venezuela’s democratically elected National Assembly, who condemned an illegal attempt to mortgage the country’s natural resources to keep the increasing despotic regime in power.
The move is the latest action by the Trump administration to squeeze the Maduro regime, which continues to degrade democratic institutions while overseeing the worst economic and humanitarian crisis in the country’s history.
Before his removal as Secretary of State last week, Rex Tillerson said that the administration was considering blocking all sales of Venezuelan oil in a bid to weaken the regime even further.
The White House has already imposed multiple sanctions on the Maduro regime prohibiting Americans from dealing with Venezuela’s state-run oil company Petroleum of Venezuela (PDSVA), as well as personal sanctions targeting high ranking government officials including Maduro himself.