The Venezuelan dictatorship regime has released the white paper of cryptocurrency named "Petro".
That might look as a good new, but the truth is that the caked “Petro”, hides a huge risk of legal sanctions as well as risks for the investor`s.
I decided to write this advice addressed to the cryptocurrency community, because I had watched very concerned a couple of videos of some people celebrating and inviting to invest in this cryptocurrency, which it's not a cryptocurrency in the terms that bitcoin or others are. Later I will try to explain the main reason "Petro" is not a cryptocurrency.
A brief context .-
Venezuela is passing through a communist dictatorship regimen since 1999, that has collapsed the economy and the entire infrastructure of the country. The people is starving; there is even people are eating directly from the garbage, and how happens in every dictatorship, repression of the people is the response to the problems of the people.
In the last year the international community and the government of the U.S., applied sanctions to the mains officials of the regime, even forbidding their own nationals to engage any negotiation with the government of Venezuela.
In the middle of this financial and political storm, Nicolas Maduro the dictator of Venezuela is trying to use the technology of cryptocurrency to avoid the sanctions and to finance his totalitarian regimen.
The legal risk
Previously I stated that "Petro" isn't a cryptocurrency, instead it would be more like a kind of "cryptogoverment bond", this because in practice, Petro will be a method to finance the dictatorship. In fact, the Petro will be paying interests to the owners.
The problem behind off all this is that in 2015, the opposition to the regimen of Nicolas Maduro, won the majority of seats of the Venezuela´s National Assembly, fact the generated a very deep and constantly political conflict in the environment.
Without the explicit approval of the National Assembly to emit debt, Maduro does not have any constitutional power to do so, so that’s why Petro appears as a bond of Venezuela´s national debt for that lack of the approval of the National Assembly to do so. If in the future occurred a transition to a democratic government, the new legitimate government would be entitle to declare null and unexciting that “cryptodebt” and the investors will be on the risk of suffering loses of their investment.
But the risk doesn't stop there, the government of the U.S., specifically the Department of State have warned to the people which want to buy Petro, they are also in risk to be sanctioned by this department.
https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#venezuela
The political environment maters in business
At the moment to invest is very important to know in what and whom we are giving our money to, that’s a basic rule knew by everybody. Well, the thing related to Venezuela dictatorship is that is already in serious problem to pay old debts at first. As if that was not enough, the infrastructure of state own oil company, PDVSA, is worst and worst every day. So we can imagine a dark future for the investors in Petro.
In conclusion, the Petro crypto national debt can become a legal problem for their holders, basically because the risks of receiving a sanction and getting the banks account frizzed of any other stronger sanctions for “involuntary” financing the dictatorial regime which is killing their own nationals, either by starvation, in some cases, and in other, directly murdering only for the reason of claiming for the application of the constitution.