Venezuelan activists and policy experts are urging stricter sanctions and deeper investigations into President Nicolás Maduro’s use of cryptocurrencies to bypass international restrictions.

On May 31, the US reinstated sanctions on Venezuela’s gold and oil sectors after Maduro failed to uphold a deal ensuring fairer elections scheduled for July. For nearly two decades, the US has targeted Venezuelan individuals and entities with sanctions.

“Regimes under sanctions typically seek various methods to evade them,” explained Andrew Fierman, head of national security intelligence at blockchain data firm Chainalysis Inc., and contributor to a recent report by the Woodrow Wilson International Center for Scholars. “The Venezuelan government, under Maduro, has consistently employed a wide range of evasion tactics.”

Leopoldo López, a Venezuelan dissident, and Kristofer Doucette, director of Intel Solutions at Chainalysis, co-authored an April report highlighting significant gaps in the latest sanctions. They noted that the Maduro regime has explicitly aimed to violate sanctions through its cryptocurrency initiatives.

In 2018, Venezuela introduced its own cryptocurrency, the Petro, backed by the country’s oil and mineral reserves. It was promoted as an alternative to the hyperinflated bolívar and a means to circumvent severe US sanctions. Despite mandates for financial institutions to report balances in both bolívares and Petros, the token held little practical value for ordinary Venezuelans.

In January, the government halted the use of the Petro amid an investigation into major corruption involving crypto wallets, which allegedly diverted payments meant for the state oil company, Petróleos de Venezuela SA.

“Every misappropriated dollar by the Maduro regime belongs to the Venezuelan people,” López and Doucette emphasized. “The billions that have disappeared in recent years could have revitalized the nation’s struggling economy. Instead, Maduro’s adoption of cryptocurrency exploited new technology to create a pathway for diverting national wealth, further impoverishing its citizens.”