When engaging in crypto trading, US citizens have in the past had little to worry about. However, a new warning from the US State Department could change all that. A while back, Executive Order 13827 forbade US citizens from trading in the Petro, a cryptocurrency developed by Venezuela. The currency was created to avoid heavy sanctions imposed by the US.
Warning from the State Department
According to a Forbes report, the State Department is warning US citizens to adhere to this law or face serious legal consequences. The government of Venezuela recently indicated that it would be selling part of its gold and oil for the Petro coin. Forbes wrote to the state Department regarding this issue and they responded.
According to an official from the US government, the executive order issued in 2018 makes it illegal for US citizens to buy any tokens issued by or on behalf of the Maduro regime. The official added that anyone who engages in trade with sanctioned entities, regardless of the currency, risked exposure to sanctions by the US.
The state department reiterated that all US citizens are banned from engaging in trade using the Petro. While it was not explicitly stated in the Executive order, the Maduro regime’s announcement that it was selling gold and oil for Petro is not open to US citizens. It is an economic exchange with Venezuela and it is thus an illegal activity for US citizens to engage in it.
Legal Quagmire
The letter that Forbes received form the State Department did not provide any further clarity. For instance, when trading in crypto on an exchange, it is impossible to tell who is buying or selling your crypto. As a result, you might end up engaging in trade with Venezuela. In such an instance, it would be up to the exchange to ensure Venezuelans are not using the platform. Despite this, it could still represent legal problems for US citizens trading in unregistered exchanges outside the US. To stay safe, it would be best to trade on a regulated exchange registered in the US.
A New Challenge
In the past, such as during the cold war, understanding sanctions was quite black and white. If a country had sanctions imposed on it, avoiding any conflicts would have been quite easy. However, it is no longer the case. Today, the internet and the creation of value that can be transmitted without banks poses a major challenge.
Determining where value originates, is something that many governments globally are still grappling with. However, the US still has no federal legislation that governs the crypto sector. This means that even honest citizens could find themselves in legal problems due to the lack of clarity in the law. It is something that does not appear to be getting much attention. For instance, in the current presidential race, only one candidate has mentioned crypto as part of their financial policy.
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