Experts, politicians call for scrutiny of Venezuela’s use of cryptocurrency

(Reuters) – Venezuela’s use of digital currency, which is expected to increase after the United States ordered the end of oil deals with the sanctioned country by May 31, will require greater scrutiny by regulators and law enforcement, experts said on Monday.

Venezuela’s state oil company PDVSA plans to increase cryptocurrency transactions for crude and fuel exports as the United States reimposes oil sanctions on the country, sources told Reuters earlier this month. It is unclear whether payments made by PDVSA with the digital currency Tether will be targeted by Washington from June 1.

Venezuelan opposition politician Leopoldo Lopez and expert Kristofer Doucette presented a report on Monday detailing the transactions that have taken place since Venezuelan President Nicolas Maduro took office. Democratic governments should oppose his attempts to “use cryptocurrency to move illicit proceeds into the international financial system,” the report said.

“Structures must be created to combat this type of money laundering,” said Doucette, national security leader at New York-based Chainalytics, which provides research and software to governments, exchanges, banks and insurance companies to ensure safe transactions with cryptocurrency.

Technology for digital transactions is changing rapidly, and transactions that benefit people without access to the banking system are growing rapidly in developing regions such as Latin America and Africa. But some corrupt governments move faster, making fraud harder to prevent, experts said.

Doucette and Sigal Mandelker, a lawyer who previously worked at the US Treasury Department, said at the conference organized by the Wilson Center in Washington that the US administration is making efforts to increase regulations and encourage other countries to improve supervision.

(Reporting by Marianna Parraga; Editing by Richard Chang)