Latest Report Questions the Existence of Venezuela’s Petro, Things Look a Lot Fishy

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by Bhushan Akolkar · 3 min read
Latest Report Questions the Existence of Venezuela’s Petro, Things Look a Lot Fishy
Photo: Pavlos Giorkas / Flickr

Report suggests that there is no circulation of Petro inside or outside of Venezuela and all the hype relating to it is just a big bubble that can burst anytime.

A lot has been said about Venezuela’s state-backed cryptocurrency Petro in the last few days. The idea of Petro was first floated last year in December 2017 by Venezuelan President Nicolas Maduro as an attempt to circumvent the U.S. economic sanctions. This was an attempt by Maduro to protect the country from going into the deep financial crisis.

The Maduro-led Venezuelan government has been constantly talking about the digital currency with an attempt to push it in the international market. Last week, Maduro also asked Venezuelan banks to adopt Petro which was supposedly backed by the country’s rich oil reserves and other precious commodities.

However, in a special report by Reuters, some gory details regarding the existence of Petro have recently emerged. Reuters team recently visited Atapirire, the only Venezuelan town in the center of the country which the government claims to have 5 billion barrels of Petroleum reserves. While launching the Petro token in February 2018, President Maduro claimed that these reserves shall be used to back the digital currency.

However, Atapirire residents claim that there are no efforts, so far, by the government to tap those reserves. A four-months thorough study by the Reuters team comes to a concluding that there is no trade of the Petro cryptocurrency in the country. Additionally, it is also found that neither anyone, inside or outside Venezuela has got their hands on Petro, neither it is being seen trading on any of the digital currency exchanges.

However, the only buyers of this suspicious cryptocurrency that have appeared so far are the anonymous posters on the forums like Bitcointalk. Some of the posters claiming to have the Petro tokens either look to be “scammed” and others are drawing the line of the Venezuelan government.

Not only this, there has been a difference of opinion among the Venezuelan government authorities as well. President Maduro and cabinet minister Hugbel Roa who was involved in the Petro has shared contradictory views. While Maduro has claimed that Petro is already active having raised $5 billion in ICO, Roa says that the technology supporting Petro is currently under development and nobody has been given the tokens yet.

Also, the Venezuelan government has time and again failed to provide any concrete details of its claims of raising $5 billion through ICO. On being repeatedly questioned over this, Maduro said that the anonymous nature of Petro is to help the investors circumvent the ban on Petro issued by U.S. President Donald Trump in March 2018.

“This certainly doesn’t look like a typical ICO, given the low level of transaction activity. We have found no evidence that anyone has been issued a Petro, nor of it being actively traded on any exchange,” Tom Robinson, chief data officer and co-founder of London-based Elliptic told Reuters while commenting on the ICO.

Alejandro Machado, a crypto consultant and computer scientist in Venezuela, has also fired shots at the government while accusing them of creating false hopes among the investors. “There is no way to link prices or exchange rates to a token that doesn’t trade, precisely because there is no way to know what it actually sells for,” he said.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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