Alleged Hack of Binance Triggers Huge Slide in Bitcoin

Investors are rushing to get their hands on Venezuela’s state-issued cryptocurrency, according to President Nicolas Maduro. State-run media outlets have reports that hundreds of thousands of individuals and companies have already certified their intent to purchase the Petro (PTR). Of course, the veracity of the claim has already been subject to a great deal of scrutiny.

171,000 Registrations

President Maduro announced Monday that Venezuela had received registrations from 171,000 individuals and businesses to participate in the pre-sale of Petro, which opened last week. The announcement was made on Maduro’s official Twitter page in a message that claimed 40.8% of contributors intend to pay with U.S. dollar. Another 6.5% will contribute with the euro.

Investors are also using cryptocurrencies to fund their stake in Petro, the message also read. Roughly one-third (33.8%) of registrants intend to complete their purchase with bitcoin, while another 18.4% will pay via ether tokens.

Of the 171,000 registrants, 3,523 were companies, government sources said.

Last week, the Venezuelan president said Petro had raised some $735 million in the first day of the pre-sale.

No information on the purchasers has been made public. There’s also no evidence that the tokens have been distributed to any potential investor. According to the NEM transaction ledger, the government still owns all 100 million PTR tokens. The cryptocurrency’s buyer’s guide lists the NEM blockchain as the primary infrastructure during the pre-sale.

Petro Cryptocurrency

Pegged to domestic oil barrels valued at $60, Petro is the first ever state-backed cryptocurrency to be released to the public. The Venezuelan administration say the cryptocurrency will help their country reaffirm its economic sovereignty. This is likely in reference to U.S.-led sanctions on the country over human rights violations during a popular uprising in 2014.

In the years following the protests, Venezuela’s economy would take an unprecedented turn for the worse as collapsing oil prices exposed the Communist regime’s poor planning.

Venezuela’s foreign minister recently remarked that U.S. sanctions are hampering the ability of Caracas to renegotiate its debt. This in turn is causing “panic” at international banks.

“The renegotiation of external debt is underway, but it has been made more difficult by U.S. sanctions,” foreign minister Jorge Arreaza said, as quoted by Reuters.

Arreaza claims that global banks have closed government accounts, as well as those belonging to Venezuelan businesses and embassies.

U.S. Secretary of State Rex Tillerson has indicated that a new round of sanctions targeting Venezuela’s oil industry is very much in play. In a news conference in Buenos Aires earlier this month, Tillerson said the Trump administration is evaluating the impact of oil sanctions on the Venezuelan people. Any measures that would deepen the country’s economic and political crisis would likely be avoided.

Although Caracas rarely publishes official figures, the Venezuelan economy is said to have contracted a staggering 18.6% in 2016. The country is not only fighting a deep recession, but hyperinflation and a widespread food shortage.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

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