Critics allege that Venezuelan President Maduro will use crypto to avoid sanctions

Venezuelan political critics and activists have warned that President Nicolás Maduro and his government are increasingly turning to cryptocurrency transactions as a method of evading international sanctions.

This after the United States recently reinstated gold and oil sanctions, following Maduro’s failure to honor a deal to guarantee fair elections scheduled for July.

Critics are calling for tougher penalties

For almost two decades, the US has imposed specific sanctions on Venezuela, with the aim of pressuring the government for democratic reforms. However, Andrew Fierman, head of national security intelligence at Chainalysis Inc., suggests that sanctioned regimes like Maduro’s often explore multiple avenues to circumvent these restrictions.

Nicolas Maduro and his representatives have not fully fulfilled the commitments made in the electoral road map agreement. Therefore, General License 44—which authorized transactions related to the oil and gas sector with Venezuela—will expire after midnight and will not be renewed.

— Matthew Miller (@StateDeptSpox) April 17, 2024

“When you’re talking about regimes that are subject to sanctions, they’re usually going to look for various ways to evade those sanctions. The Venezuelan government and the Maduro regime have been doing this in a wide variety of methods over the years,” Fierman told Bloomberg .

These concerns are detailed in a report by the Woodrow Wilson International Center for Scholars, co-authored by Venezuelan dissident Leopoldo López and Chainalysis’ Intel Solutions Director Kristofer Doucette. The report highlights the gaps in the latest sanctions, especially in the context of the Maduro regime’s stated goal of leveraging cryptocurrency projects to bypass these international barriers.

López and Doucette highlight in their report the economic impact of the alleged cryptocurrency manipulations of the Maduro regime. “Every dollar embezzled by the Maduro regime rightfully belongs to the Venezuelan people,” they wrote.

“The billions that have disappeared in recent years represent a grotesque sum, which could have been instrumental in revitalizing the country’s failing economy. Instead, Maduro’s adoption of cryptocurrency exploited an emerging technology to carve out a new way to divert the wealth of the nation, further impoverishing its citizens.

They call on the United States and the European Union to implement more comprehensive and stricter sanctions and urge other nations to investigate the Venezuelan government’s use of cryptocurrencies to evade sanctions.

Chainalysis Uncovers $70 Million in Stablecoin Transfers

Further analysis of the blockchain by Chainalysis revealed that SUNACRIP, Venezuela’s National Superintendency of Cryptoassets and Related Activities, was actively transferring large volumes of tokens to multiple accounts within different cryptocurrency platforms.

Transactions tracked by Chainalysis indicated that more than $70 million in stablecoins had been processed through addresses likely managed by SUNACRIP or affiliates, facilitating smoother financial operations despite the sanctions.

In 2018, the Venezuelan government introduced the Petro, a cryptocurrency backed by the country’s oil and mineral reserves, to combat hyperinflation and avoid US sanctions. Despite mandates for its use, the token had limited practical adoption. In January, the government suspended the Petro amid a corruption investigation involving improper payments to the state oil company, Petróleos de Venezuela SA.

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