Venezuelan President Nicolás Maduro and his government have been accused by political critics and activists of trying to find ways to get around international sanctions, with cryptocurrency transactions being a potential method they may use.
In July, Maduro failed to follow through on an agreement for a free and fair election, leading to the U.S. reimposing gold and oil sanctions on certain members of the Venezuelan government in May.
According to Andrew Fierman, the head of national security at Chainalysis, some sanctioned regimes attempt to evade sanctions using cryptocurrency. This raises concerns, as members of the U.S. Congress in 2022 expressed worries about whether sanctioned parties might use cryptocurrency to move funds out of Russia, leading to the introduction of bills to prevent this, as reported by the Congressional Research Service.
Chainalysis conducted a blockchain analysis of SUNACRIP, a crypto oversight body established by the Venezuelan government in 2018. The analysis showed that SUNACRIP frequently transferred significant amounts of tokens across various accounts on different cryptocurrency platforms, with transactions totaling over $70 million in various stablecoins.
The U.S. Department of State spokesperson, Matthew Miller, stated earlier this year that Maduro and his camp had not fully upheld their electoral roadmap agreement. As a result, General License 44, which allowed transactions related to the oil and gas sector with Venezuela, would not be renewed after midnight, leading the U.S. Treasury Department to issue replacement licenses to companies, granting them 45 days to phase out their operations and transactions in Venezuela’s oil and gas sector.
Venezuela’s government previously attempted to bypass U.S. sanctions by creating a cryptocurrency called Petro in 2018. However, following an investigation into a corruption case, the use of the token was banned. Analysts suggest that crypto wallets were used to divert payments meant for the state-run oil company, Petróleos de Venezuela SA, a tactic that President Maduro may consider emulating.
Political observers believe that Maduro is facing a dilemma. Most opinion surveys indicate that he may lose in the polls, forcing him to choose between accepting defeat and negotiating a transfer of power with legal protections or manipulating or annulling the election results. This decision will have significant implications for Venezuela’s government as it navigates the complexities of international sanctions and cryptocurrency transactions.