The controversial Venezuelan cryptocurrency has been ruled illegal by one half of the country’s legislature today, citing domestic constitutional restrictions against the move.
One half of Venezuela’s lawmaking apparatus, the Asamblea Nacional, has ruled that the controversial petro cryptocurrency is illegal under Venezuelan law, while offering frank criticism of the project, and of the country’s President, Nicolas Maduro.
The assembly, which is comprised of politicians on balance opposed to the President, brandished the project a fraud, while warning investors of serious risks to their capital. Further, lawmakers declared the measure unconstitutional, in breach of requirements for any form of state borrowing to carry the support of parliament.
Announcing their ruling, the group of lawmakers were forthright in their condemnation of the President and the ICO, which has reportedly raised $735 million to date, though some have doubted the veracity of the figures.
They went on to describe the ICO as the latest event in an ongoing crisis of politics and governance in the country, reflecting ongoing political, social and economic difficulties in Venezuela under Maduro.
According to the President, the state-backed cryptocurrency, known as the ‘petro’, is to be linked to the country’s natural resources. Ultimately, the decentralised nature of the underpinning blockchain technology would allow Venezuela to effectively circumvent international sanctions, in a move that has drawn sharp criticism at home and globally.
Representative Rafael Guzman, chair of the economic and finance commission, described the petro as nothing more than an attempt from the government to embezzle money from the Venezuelan people.
“This deepens the crisis that we are living in. The PTR is another example of corruption, and we will come out of this crisis with measures that we have announced from this Parliament.”
The ruling is non-binding for the President, and is unlikely to have any disruptive impact on the petro. In any event, the currency has already been issued, according to claims from the President’s office, despite blockchain records showing the originating wallet still holds all 100 million petro tokens.
While opposition to the petro at home and internationally remains significant, few believe the Maduro regime will be swayed from its current course of action.