Venezuelan President Nicolás Maduro and his administration are reportedly exploring the use of cryptocurrency to circumvent recent US sanctions, according to critics and Venezuelan crypto activists.
The allegations come in the wake of renewed US sanctions imposed on Venezuela’s oil and gold sectors on May 31, due to the government’s failure to adhere to democratic principles ahead of the upcoming elections in July.
Andrew Fierman, head of national security intelligence at Chainalysis, told Bloomberg that regimes under sanctions typically seek various methods to evade these restrictions. “The Venezuelan government and the Maduro regime have been doing this across a wide array of methods over the years,” he stated.
A report by the Wilson Center, authored by Leopoldo López and Chainalysis’s Kristofer Doucette, highlighted the Maduro government’s historical use of cryptocurrencies to bypass US sanctions. The authors urged key governments to rigorously enforce existing restrictions to prevent the exploitation of digital currencies by the Maduro regime.
Venezuela’s history with cryptocurrency includes the launch of the national oil-backed crypto token ‘Petro’ in 2018, which President Maduro hailed as a potential economic savior. However, the Petro failed to gain widespread adoption and ceased operations on January 15, 2024.
The Wilson Center report also pointed to Venezuela as an example of how digital currencies can facilitate illegal activities such as money laundering and corruption. The report called for democratic governments to take decisive action against Maduro’s alleged attempts to use cryptocurrency to move illicit funds into the international financial system.
Venezuela’s situation is not unique, as other sanctioned nations, including Iran and Russia, have also initiated crypto-related programs to evade international sanctions.
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