Venezuela Shuts Down Petro Blockchain Over Corruption Scandal [Advance Cash ]

Venezuela Shuts Down Petro Blockchain Over Corruption Scandal

The government of Venezuela plans to shut down the Petro blockchain once it reimburses major Petro holders, which include large stores that have received Petro payments.

Announced on Monday, the decision to liquidate the Petro comes three months after President Nicolas Maduro appointed a new restructuring board for the National Superintendence of Crypto-Assets of Related Activities (SUNACRIP) after senior officials were caught in a $20 billion corruption scheme involving the embezzlement of funds from the country's oil operations.

According to a speech given by Maduro, when the Petro failed to provide profit or utility, SUNACRIP officials allegedly resorted to a mafia-like approach by withholding public funds meant to reach PDVSA's coffers. They would have assumed the role of unofficial Venezuelan oil merchants for the world market.

Apparently, SUNACRIP used cryptocurrencies such as USDT (Tether) to facilitate oil sales around the world.

Maduro removed Joselit Ramirez from his post and arrested on suspicion of being involved in the scheme.

Following the revelation of Ramirez's alleged involvement in corruption, energy suppliers in Venezuela have taken action by shutting down several crypto-mining operations.

Local media reports and tweets from the National Association of Cryptocurrencies in Venezuela indicate that mining facilities have been shut down in the states of Carabobo, Bolivar and Lara. Moreover, the authorities have ordered many crypto exchanges to stop their activities.

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Petro originally introduced to circumvent US sanctions

It is a cryptocurrency developed by the government of Venezuela and introduced in February 2018.

The main reason for creating the Petro was to combat the severe economic crisis that Venezuela was facing at the time. The country was struggling with hyperinflation, falling oil prices and a rapidly declining national currency, the bolivar.

The Petro was introduced as a digital currency backed by Venezuela's vast oil reserves, making it the world's first state-backed cryptocurrency.

The government intended to use the Petro to circumvent international sanctions imposed on Venezuela and access international funding.

Additionally, it has been touted as a way to attract foreign investment and stimulate economic growth. This failed as the United States responded by imposing sanctions on the Petro as well, ensuring that it only traded within Venezuela's borders.

Beyond that, however, the Petro has faced significant skepticism and criticism from various quarters, including the Venezuelan opposition, international financial institutions, and cryptocurrency pundits.

Concerns have been expressed about the lack of transparency, governance and economic viability of the project. As a result, the Petro has not been widely accepted or adopted around the world, and its actual impact on the Venezuelan economy remains limited.

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