(Reuters) – Use of digital currencies in Venezuela, expected to rise after the United States ordered an end to oil deals with the sanctioned country by May 31, will require closer scrutiny from regulators and law enforcement, experts said Monday.
Venezuela’s national oil company PDVSA plans to increase cryptocurrency transactions for its crude and fuel exports as the United States reimposes oil sanctions on the country, sources told Reuters earlier this month. It is unclear whether PDVSA’s Tether digital currency payments will be targeted by Washington starting June 1.
Venezuelan opposition politician Leopoldo Lopez and expert Kristofer Doucette presented a report on Monday detailing transactions made since Venezuelan President Nicolas Maduro took office. Democratic governments should counter its attempts “to exploit cryptocurrency to move illicit proceeds into the international financial system,” the report said.
“Structures need to be put in place to combat this type of money laundering,” said Doucette, head of national security at Chainalysis, a New York-based provider of research and software to governments, stock exchanges, to banks and insurance companies to secure transactions with cryptocurrency.
Digital transaction technology is evolving rapidly and transactions are growing rapidly in developing regions, including Latin America and Africa, to the benefit of people without access to the banking system. But some corrupt governments act more quickly, making it difficult to prevent fraud, experts say.
Doucette and Sigal Mandelker, a lawyer who previously worked at the U.S. Treasury Department, told a conference hosted by the Wilson Center in Washington that the U.S. administration is working to increase regulation and encourage others countries to improve their surveillance.
(Reporting by Marianna Parraga; editing by Richard Chang)
