FameEX Hot Topics | Venezuela Expected to Continue Using Crypto to Circumvent New US Sanctions

According to Venezuelan dissidents and cryptocurrency analysts, the Venezuelan government is likely to continue using cryptocurrencies to bypass the renewed sanctions on oil and gold activities. Despite corruption cases involving crypto affecting Nicolas Maduro’s administration, experts believe these tools will keep diverting funds from regular channels.

Dissidents and cryptocurrency analysts indicate that Venezuela will persist in using crypto to circumvent the new set of sanctions imposed by the U.S. last month. Cryptocurrency has been a tool for Maduro’s administration to counter the impact of oil and gold sanctions reimposed in May, following allegations from the Biden administration that Maduro has not adhered to agreements to ensure a fair climate for the upcoming presidential election on July 28.

Andrew Fierman, head of national security intelligence at Chainalysis, a blockchain security firm, confirmed that crypto has been used previously in combination with various methods over the years. "When you're talking about regimes that are subject to sanctions, they're typically going to look for a variety of ways to evade those sanctions," he stated.

Recently, Venezuelan authorities halted cryptocurrency activities, including Bitcoin mining, due to a multi-billion-dollar corruption case involving crypto and oil sales. Despite the involvement of Sunacrip, the cryptocurrency watchdog agency, its former head Joselit Ramirez, and other high-ranking ministers, crypto remains a primary tool for evading sanctions. This perspective is supported by the "Crypto in Venezuela: Two Sides of a Coin" report from the Woodrow Wilson International Center issued in April.

Chainalysis previously identified over $70 million in cryptocurrency transactions managed by Sunacrip or closely associated individuals to streamline transactions. PDVSA, the state-owned oil company, has been preparing to migrate more of its portfolio to be paid in USDT, the largest dollar-pegged stablecoin, demanding more than half of each oil shipment’s worth to be paid in this manner.

However, Chainalysis could not provide data on the number of seized crypto transactions linked to sanctions-evading activities. Despite these challenges, it appears that Venezuela will continue leveraging cryptocurrency as a means to navigate around international sanctions and maintain economic activity.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.