Digital Currencies: International Actions and Regulations

The Financial Services Regulatory Authority has updated and expanded its guidance through amendments to its cryptoasset regulatory framework. The amendments change the terminology used in the framework from "crypto asset" to "virtual asset," a change that aligns with those descriptions used by the Financial Action Task Force (FATF) (see Financial Action Task Force (below)). The FATF recommendations are an international standard for regulation of crypto assets including KYC requirements, anti-money laundering and fraud prevention rules, and sanctions and screening controls.

The amendments also overhaul regulations to move the applicable rules from a singular category to those respective to the underlying activities. This means that such assets can be regulated according to their idiosyncratic natures and not as a monolithic class. Source.

The 2018 Financial Law states that the purchase, sale, use, and possession of so-called 'virtual currency' are prohibited. "A virtual currency is one used by Internet users over the Internet. It is characterized by the absence of physical support such as coins, paper money, or payments by check or credit card."

Any violation of the provision is stated to be punishable in accordance with the laws and regulations in force. Primary Source. Secondary Source.

AUSTRAC suspended two cryptocurrency exchanges after an investigation found the companies were being used for drug trafficking. This is the first suspension of cryptocurrency exchanges in the country since April 2018 legislation that added cryptocurrency exchanges to AUSTRAC's purview.

AUSTRAC is Australia's intelligence agency tasked with monitoring financial transactions to identify money laundering, organized crime, tax evasion, welfare fraud, and terrorism. Digital currency exchanges are entities that exchange money (Australian or foreign currency) for digital currency, or vice versa. It is illegal to operate a digital currency exchange without registration. AUSTRAC can impose civil penalty orders, enforceable undertakings, infringement notices and remedial directions, among other enforcement actions. Primary Source. Secondary Source. Tertiary Source.

Australia's Digital Transformation Agency (DTA) cautioned other government agencies of the limitations of using blockchain technology to share and exchange information. In an advisory, The DTA, which worked in a cross-agency team to determine the suitability of blockchain technology for government services, discovered gaps in the technical and business aspects of technology when applied to trial projects and in comparison with different technologies.

The gaps include additional risks encountered when using permissioned consortium blockchains, where leading users often control the blockchain. The DTA also noted that there is no default encryption for blockchains, and that data is available to all users regardless of whether a blockchain is private or public. The DTA suggested that agencies should halt their experimentation and prototyping and instead focus on real-world applications that use proven alternatives and are available for immediate use, adding that agencies should focus on the needs of their users and explore applications that will meet those needs. Source.

On June 5, 2019, the Cayman Islands Proceeds of Crime (Amendment) Law, 2019 was signed into law. As we have previously blogged, this law amends the Proceeds of Crime Law (2019 Revision) by broadening the powers and duties of the country's regulatory authorities, including the Financial Reporting Authority and the Anti-Money Laundering Steering Group, over financial due diligence and governance.

At the same time, a new bill has been introduced that requires a narrow subset of Cayman Islands companies—those that carry out "virtual asset services"—to comply with the Know Your Customer (KYC) and related obligations set forth in the Anti-Money Laundering Regulations (2018 Revision). The definition of "virtual asset services" appears to exclude security and utility token issuers. Under the bill, a "virtual asset" means "a digital representation of value that can be digitally traded or transferred, and can be used for payment or investment purposes." Accordingly, those issuers may yet be able to retain the flexibility to adopt alternative vetting processes. Source.

The Cayman Islands Proceeds of Crime (Amendment) Bill, 2019 would amend the Proceeds of Crime Law (2019 Revision) by broadening the powers and duties of the country's regulatory authorities over financial due diligence and governance, including the Financial Reporting Authority and the Anti-Money Laundering Steering Group. The bill also lessens the burden for a person to be found guilty of "tipping off" wrongdoers that a report (similar to a Suspicious Activity Report) is made or is likely to be made, while providing a safe harbor for those who disclose information in pursuit of mandated legal disclosures.

Additionally, the bill would include the activities of a "virtual asset service" as a "relevant financial business"; entities that are relevant financial businesses under Cayman law have regulatory and reporting obligations. The bill defines a "virtual asset" as a "digital representation of value that can be digitally traded or transferred, and can be used for payment or investment purposes." Source.

Deutsche Bank published a report making predictions and recommendations for reinvigorating global economies that have suffered during the COVID-19 pandemic. The report took a definitive position that Central Bank Digital Currency (CBDCs) will replace cash.

The report concluded that China (in addition to Sweden) is leading CBDC initiatives, given that the country has already started piloting a national e-currency.

The report said that the two largest hurdles, which affect developed countries in particular, are low interest rates and privacy expectations. According to the report, these factors are less obstructive in developing economies, which is why China has an edge. Source.

China has expanded the scope of inheritance under its civil code to include virtual assets. Effective January 1, 2021, "virtual assets, such as bitcoins, [can] be inherited" as property if legally acquired by a natural person.

Multiple Chinese courts have also ruled that virtual currencies, including Ethereum, are property. Source.

A recent report stated that China's central bank intends to issue a state-backed digital currency called DC/EP (Digital Currency/Electronic Payments) to seven entities - three banks, the Industrial and Commercial Bank of China, the Bank of China, and the Agricultural Bank of China; three technology companies, Alibaba, Tencent, and Union Pay; and an association of Chinese banks.

The digital currency is designed to be used for payments currently managed in Renminbi, China's fiat currency. Of note, unlike decentralized cryptocurrencies like bitcoin, the DC/EP is reported to be centrally managed by China's central bank, which will control the digital currency's supply.

China's central bank has denied the report. Source.

The Danish Assessment Board (Skatterådet) gave its ruling on March 25, 2014 in the case of SKM2014.226.SR (published on April 1, 2014).

The board ruled that bitcoins are not considered an official currency for tax and VAT purposes, as bitcoin is not a currency that:

• Is regulated by the operators on the global currency markets
• Is subject to regulation by a central bank
• Can be withdrawn from circulation
• Is affiliated to a state or currency area

Furthermore, fluctuation in the value of bitcoins is not taxable as gains or losses on currency covered by the Tax Act on Capital Gains and Losses on Debt and Claims. This conclusion is based on the description of the bitcoin system according to which purchase and ownership of bitcoins does not involve a debtor or creditor and, thus, neither a claim nor debt exists for tax purposes. Source.

The EU Blockchain Observatory & Forum published a report titled "EU Blockchain Ecosystem Developments," which provides an overview of technology, market, and regulatory developments in blockchain in 29 countries, including EU member states, Switzerland, and the UK. The report also discusses the future of blockchain in the EU and across the world. Source.

In addition to individual country-level analyses, the team's study reached the following macro-level conclusions:

• The countries are at varying stages of development in blockchain and crypto-assets regarding (1) regulation and policy, and (2) business activity. This has led to market fragmentation and an uneven distribution of entrepreneurial and investment clusters.
• Most European countries do not yet have specific and holistic regulatory or legislative frameworks for digital assets, including taxation laws. The tax treatment of cryptocurrencies is based on existing (not crypto-specific) legislation, and general principles and guidance from each national tax authority. Most countries' laws pertaining to AML and anti-terrorist financing apply to virtual currencies, despite not having specific legislation.

(See specific country updates herein for further detail.)

The 5th EU Anti-Money Laundering Directive (AMLD 5) sets standards for Know-Your-Customer (KYC) and Anti-Money-Laundering (AML). In addition to other provisions, service providers such as financial institutions, notaries and lawyers are subject to the rules, New for the 5th Directive is that the directive covers virtual currency platforms and custodian cryptocurrency wallet providers. The restrictions cut down on anonymity in transactions and require various forms of identity verification. It imposes a September 10, 2020 deadline for Member States to create central registries which allow timely identification of any natural or legal person holding or controlling bank, savings, or safe deposit accounts. This information will be accessible by financial intelligence units (FIU) and particular national authorities. Primary Source. Secondary Source.

A "virtual currency" is defined as a "digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically;"

"Custodian wallet provider" is defined as "an entity that provides services to safeguard private cryptographic keys on behalf of its customers, to hold, store and transfer virtual currencies.'"

The Securities and Futures Commission (SFC) of Hong Kong released a statement announcing its plan to regulate virtual asset portfolio managers, virtual asset fund distributors, and a plan for a regulatory "sandbox" to allow the SFC to study platforms trading in virtual assets. The SFC noted that it does not perceive virtual assets as a risk to financial stability but that investing in virtual assets poses significant investor protection risks that the Commission seeks to address. Under the existing regulatory framework, the SFC only has jurisdiction to regulate virtual assets where they fall under the definition of a "security" or "futures contract." Consequently, certain firms (i.e. virtual asset portfolio managers and virtual asset fund distributors) investing in virtual assets do not fall under the purview of SFC regulation. Going forward, the SFC intends for these firms to be licensed or registered with the SFC, regardless of whether the virtual assets are considered to be securities or futures contracts.

For virtual asset trading platforms, the SFC said that it will establish a regulatory "sandbox" in which platforms will not require licensure to operate. The SFC's purpose for this framework is purely observational, to determine whether virtual asset trading platforms are appropriate for SFC regulation, based on whether the SFC believes it can effectively provide protection against risks to investors. After the exploratory phase, if the SFC determines that regulation is suitable, it would likely propose a licensing scheme with standards of conduct comparable to the standards for existing providers of automated trading services. Source.

A panel tasked with reviewing how India should regulate cryptocurrency use has proposed fines and up to 10 years in prison for individuals found using crypto in the country. To support its recommendations, they pointed to the fact that the majority of global cryptocurrencies originate outside of India and argue that cryptocurrencies "are inconsistent with the essential functions of money/currency" and cannot replace fiat currencies.

In addition to its recommended penalties, the panel suggested that India explore creating its own sovereign cryptocurrency, along with exploring using blockchain technology to enable cross-border payments as well as recording land deeds. The panel was created by the Ministry of Electronics and Information Technology, the Securities and Exchange Board of India, and the Reserve Bank of India. The ban and suggested penalties mirror language in a draft bill created by India's Economic Affairs Secretary last month. Source.

As part of the Financial Stability board's report to the G20, work by the International Organization of Securities Commissions (IOSCO), the Bank of International Settlement's (BIS) Committee on Payments and Market Infrastructures (CPMI) and Basel Committee on Banking Supervision (BCBS) was referenced.

CPMI collaborated with FSB on a framework for crypto-asset stability and continues to conduct work on applications of distributed ledger technology.

IOSCO established an ICO Consultation Network as part of a broader support framework to assist members in May 2018, following a public announcement regarding crypto-asset concerns in January 2018. IOSCO may explore whether IOSCO's Principles for Secondary and Other Markets would be applicable to crypto-asset platforms.

The BCBS is conducting research into banks' exposures to crypto-assets. Source.

The Iranian government's economic commission has approved cryptocurrency mining for the first time. Central Bank of Iran Governor Abdolnaser Hemmati issued a statement saying that the mining of digital coins has been approved and will be discussed at a future cabinet meeting. In addition, Iranian Deputy Energy Minister Homayoun Haeri said that government ministers will discuss and approve an electricity rate for mining businesses, which will likely restrict miners from using the subsidized internal energy system. In recent years, a number of "mining" farms moved to Iran to take advantage of the low cost of electricity; according to news reports, many of those miners come from China, and China has allegedly encouraged Iran to legalize mining activity.

The legalization comes just months after the country cracked down on two crypto mining farms, seizing their equipment. At the time, the crackdown was reportedly due to the adverse impact of cryptocurrency mining activity on the country's energy supply. Electricity in Iran is both subsidized by the government and resource-stressed as a result of international sanctions. Iran provides cheap electricity in part to stimulate internal agricultural and industrial activity. Source no longer available.

The Japanese Cabinet has approved draft amendments to its rules governing margin trading of cryptocurrencies. The amendments would cap cryptocurrency margin trading at two to four times the initial deposit. Additionally, exchanges that allow margin trading of cryptocurrencies will be required to register with the Japanese government within 18 months of the amendment's effective date. Failure to register would result in closure of the exchange. Finally, cryptocurrency exchanges will be divided into two categories: those that offer margin trading and those that issue tokens from initial coin offerings.

If finalized, the amendments would go into effect in April 2020. Source.

Japan passed a bill that includes amendments to the Payment Services Act (the PSA) and the Act on the Prevention of Transfer of Criminal Proceeds (the Criminal Proceed Transfer Act), both of which provide for virtual currency exchange transactions to be regulated by the relevant authorities.

The following persons or entities will fall under the category of a virtual currency exchange operator (VCEO): a person or entity that, in the course of trade, engages in (i) purchases and sales of the virtual currency or exchanges the virtual currency for another virtual currency; (ii) an intermediator or agent of the above transactions; or (iii) custody or safekeeping services in relation to a dealing or broking transaction set forth in (i) or (ii) above. Such person or entity is required to register with the Prime Minister as a VCEO.

A foreign entity that engages in the virtual currency exchange business outside of Japan and does not obtain such registration with the relevant regulator shall be prohibited from making solicitations of the businesses indicated in (i) through (iii) above to a resident in Japan. Further, a VCEO is now categorized as a "Specified Business Operator" under the Criminal Proceed transfer Act. Accordingly, a VCEO is required to confirm the identities of its customers at the time of any transaction and to report any suspicious trading to the relevant authorities. Finally, the amendments left unclear whether the simple purchase of virtual currencies would be subject to Japanese tax.

The legislation was promulgated on June 3, 2016 and it is expected to be enforced within one year from the promulgation date. Source no longer available.

Mexico's central bank recently proposed new regulations that would effectively prevent crypto exchanges from operating within the country. The regulations would prohibit financial institutions regulated by the central bank from offering exchange, transmission, or custody services for cryptocurrencies. The reported reasoning behind the move is to protect customers from the volatility of digital assets and because of the "complexity of the mathematical and cryptographic processes that underlie digital assets."

There will be a 60-day period for the public to submit comments regarding the proposed rule. Source no longer available.

The Russian Supreme Court has added the illicit use of cryptocurrencies to the list of criminal offenses related to money laundering, introducing new amendments to a July, 2015 AML decree. The ruling does not give a legal definition to "cryptocurrencies." According to coverage of the ruling, converting crypto to fiat is not considered a crime, so that courts must prove that the digital assets in question were obtained by criminal means.

The Central Bank of Russia has also published a new set of rules for suspicious transactions, broadly characterizing any cryptocurrency-linked transaction as a potential money laundering risk. Primary Source. Secondary Source.

The Monetary Authority of Singapore (MAS) published a consultation paper proposing legislation for payment services. The proposed bill would expand the scope of regulation to include the purchase and sale of virtual currencies and other innovations used in domestic money transfers and merchant transactions via point-of-sale or online payment gateways. Specifically, payment firms will only need to hold one license under a single regulatory framework to conduct payment activities, and only certain payment activities will require licensing. The MAS indicated its commitment to ensuring that new legislation is not overly burdensome, noting that the bill will not apply a one-size-fits-all to all payment service providers, but will differentiate in how regulatory requirements apply based on the potential risks of specific payment activities.

The new legislation would be incorporated into Singapore's existing laws on payment services, the 2006 Money-Changing and Remittance Businesses Act. The draft is the second of its kind, and was amended following feedback received from the first consultation paper. The current paper is available for comment until January 8, 2018. Source no longer available.

South Korea's Financial Services Commission (FSC) will continue its 2017 ban on raising money through virtual currencies, including ICOs. In a January 30 press release, the FSC discussed the results of a survey sent out to 22 companies. The takeaways from the survey include the following: (i) investments in ICOs are still very risky, and poor returns for ICO purchasers is a cause for concern; (ii) companies outside of South Korea are conducting ICOs in more favorable jurisdictions and raising funds from domestic Korean investors; and (iii) there is still a lack of uniform data and information for investors to digest before making ICO investment decisions.

Because of these issues, the ban on ICOs in South Korea will continue. However, the FSC's press release also discussed plans by the Korean government to research and foster regulated blockchain initiatives. These include pilot projects, tax credits for research and development costs, and training initiatives. Source no longer available.

As of April 2019, a draft cryptocurrency bill is reportedly in process and 'favorable' towards cryptocurrencies.

The CNMV issued guidance in March 2019 for FinTech companies with activities that may be related to CNMV regulation, including cryptocurrencies. Source.

02.18.2019

The Bank of Spain has published a warning on its blog regarding the unregulated cryptocurrency market in the country. The blog post largely discusses the risks associated with making purchases or payments with cryptocurrency, but it also notes that the European Union's own understanding of cryptocurrencies is continuously evolving.

The Bank of Spain explained that because no laws regarding cryptocurrency regulation have been approved in the country, any kind of crypto-related companies or exchanges are not supervised or authorized in any manner by the bank. The post also cautions that crypto platforms are not subject to Spain's Deposit Guarantee Fund, which protects customers' bank deposits up to €100,000 in the event that a bank goes bankrupt. Source.

Deutsche Bank published a report making predictions and recommendations for reinvigorating global economies that have suffered during the COVID-19 pandemic. The report took a definitive position that Central Bank Digital Currency (CBDCs) will replace cash.

The report concluded that Sweden (in addition to China) is leading CBDC initiatives, given that the country has already started piloting a national e-currency. Among other recommendations, the report encouraged European countries to move swiftly towards CBDCs. Source.

FINMA notes that its own regulatory environment complies with the Financial Action Task Force's (FATF) digital asset regulation issued in June 2019. FINMA reiterates that blockchain businesses under FINMA's supervision are subject to Switzerland's Anti Money Laundering Act, and, as a result, must verify customer identities, apply a risk-based approach to monitoring for money laundering risks, and report suspicious activity identified on their platforms. In other words, laws that apply to payment orders effected through banking institutions apply equally to blockchain payments as they do to payments conducted through banking institutions.

On the same day that FINMA issued its guidance, it also granted banking and securities dealers' licenses to two blockchain companies - SEBA Crypto AG and Sygnum AG. SEBA Crypto AG plans on providing asset management with crypto custodial services and transaction services. Sygnum AG plans on providing wealth management and traditional banking services using blockchain technology. Source no longer available.

The Swiss Financial Market Supervisory Authority (FINMA) revealed potential ICO regulation, which would use a three-tier system for classifying tokens based on their use and the rights and benefits they confer on a purchaser. The proposed plan, which has not yet been implemented, sets forth four groups of tokens/coins:

1. Payment tokens (cryptocurrencies), which would not be classified as securities;
2. Utility tokens, which would generally not be considered securities if they have a use or can be exchanged for a service. However, the purchaser must be able to use the token at the time of the ICO;
3. Asset tokens, which are widely considered securities and are subject to Swiss Securities Laws; and
4. Hybrid tokens, which will have to be assessed on a case-by-case basis.

Source.

The Swiss federal council issued a report on virtual currencies examining the economic significance, legal treatment and risks of virtual currencies. The report concludes that there is no present need for legislative measures to be taken given that virtual currencies are a marginal phenomenon and many of their applications are covered by existing financial, criminal and contract laws. Source.

The Swiss Financial Market Supervisory Authority issued a fact sheet clarifying that the purchase and sale of bitcoins on a commercial basis, and the operation of trading platforms used to transfer money or bitcoins from a platform's users to other users, are subject to Switzerland's anti-money laundering act. Notably however, a banking license is required by providers who accept bitcoins from clients and administer bitcoin holdings for clients. Source no longer available.

Following its departure from the European Union, the United Kingdom has released a Financial Services Statement detailing certain new approaches that HM Treasury will take in the future. The Chancellor of the Exchequer, Rishi Sunak, said the government will propose a regulatory plan for stablecoin initiatives to bring them under the same level of oversight as traditional payment methods.

The chancellor said he supported the Treasury and Bank of England's research and work on a CBDC in the U.K., without providing details or status of such a program. A press release from the Exchequer said that the U.K. wants to "lead the conversation" about new technologies like stablecoins and CBDCs and remain at the forefront of technological innovation.

On November 12, Bank of England Governor Andrew Bailey said in a panel discussion with the European Central Bank that he did not think stablecoins could be trusted as a store of value like traditional currencies and did not believe they should be broadly adopted. He did, however, express confidence in a CBDC, which he believes provides a "guarantee and certainty of value." Source.

The U.K. Financial Conduct Authority (FCA) has finalized and published a comprehensive policy statement that lays out guidance, including a reframed taxonomy of cryptoassets, to assist market participants in understanding whether cryptoassets are regulated by the FCA or whether they are outside their regulatory perimeter. The finalized guidance distinguishes cryptoassets as (1) security tokens, (2) e-money tokens, or (3) unregulated tokens.

A security token is described as a token that provides rights and obligations akin to "specified investments" (as defined in the Regulated Activities Order (RAO), including those that are financial instruments under the second Markets in Financial Instruments Directive), and explicitly excludes "e-money tokens." For example, security tokens are likely to have characteristics that mean they are the same as or akin to traditional instruments like shares, debentures, or units in a collective investment scheme. Security tokens are subject to the FCA's oversight under the RAO, pursuant to the Financial Services and Markets Act of 2000.

E-money tokens are cryptoassets that meet the definition of "e-money" under the E-Money Regulations 2011 (EMRs), namely, cryptoassets that represent "(i) electronically stored monetary value that represents a claim on the issuer, (ii) issued on receipt of funds for the purpose of making payment transactions, (iii) accepted by a person other than the issuer, and (iv) not excluded under regulation three of the EMRs." E-money tokens are subject to the FCA's oversight under the EMRs (and potentially other legislation).

The final category of unregulated tokens are all other tokenized cryptoassets that do not meet the definition of a security token or an e-money token. These cryptoassets, as the name implies, fall outside the FCA's regulatory perimeter. This unregulated category potentially includes cryptoassets colloquially referred to as "utility tokens" and "exchange tokens," provided that they do not otherwise meet the definition of a security token or e-money token. The guidance also addresses "stablecoins" (i.e., cryptoassets that attempt to stabilize volatility), noting that such stablecoins cannot be readily categorized and require a case-by-case analysis to determine their category. Source.

The United Kingdom's Financial Conduct Authority (FCA) is proposing a prohibition on cryptocurrency-based derivatives. According to a March 7, 2019, press release, the FCA alleges that these types of financial products are inappropriate for retail investors "who cannot reliably assess the value and risks of derivatives or ETNs that reference certain cryptoassets" and a ban is necessary to protect investors. FCA officials estimate that the prohibition could provide a £75 million to £234.3 million a year benefit to retail investors.

The FCA also announced plans to publish its final guidance on Cryptoassets later this summer. The guidance seeks to help market participants better understand how the FCA's regulations apply to cryptocurrencies. We discussed this guidance in a previous blog post. Source.

The United Kingdom's Financial Conduct Authority (FCA) recently published a consultation paper (CP19/3) providing guidance on various aspects of "cryptoassets." The FCA is seeking public comment on its guidance. The consultation closes May 4, 2019, and the FCA anticipates issuing a policy statement in Summer 2019. The guidance divides cryptoassets into three categories - exchange tokens, security tokens, or utility tokens. The guidance states that exchange tokens are generally outside the FCA's regulatory authority. Security tokens are likely within the FCA's authority. Utility tokens typically do not have features that would make them similar to securities, and so would not be regulated by the FCA unless the utility tokens meet the definition of e-money. The FCA confirms that in some instances, depending on how they are structured, cryptoassets can constitute e-money. It notes that exchange tokens like Bitcoin, Ether and other equivalents are unlikely to represent e-money because, amongst other things, they are not usually centrally issued on the receipt of funds, nor do they represent a claim against an issuer. The FCA is clear that the use of cryptoassets are not covered by the scope of the PSRs because they only cover activities with regards to funds (and cryptoassets are not deemed 'funds'). The FCA notes that stablecoin, or any token that is pegged to a currency (like USD or GBP) and is used for the payment of goods or services on a network, could potentially meet the definition of e-money if all other requirements are met.

The proposed FCA Guidance clarifies where different categories of cryptoasset tokens fall to be in relation to the FCA's regulatory perimeter. It specifically focuses on whether cryptoassets are likely to be:

• specified Investments under the UK's Regulated Activities Order (RAO)
• financial Instruments under MiFID II
• e-money under the Electronic Money Regulations 2011 (EMRs)
• captured under the Payment Services Regulations 2017 (PSRs)

Source.

Venezuela launched its government-backed "Petro," which had been planned since late 2017. Each token will be backed by, and valued at the price of, a barrel of Venezuelan crude oil, according to President Maduro. The official website for the Petro published guidelines for how to set up a virtual Petro wallet, but no information was provided on exchanges supporting the currency. President Maduro indicated that a private sale will be held to attract investment from international investors.

The launch follows a declaration by Venezuela's opposition-led parliament in January 2018 that the Petro is illegal, in that it violates constitutional requirements that the legislature approve any borrowing measures. The opposition party also attacks the Petro as an effort by President Maduro to mortgage the country's oil and will attract corruption. Source.