Venezuela’s usage of digital currencies, which is anticipated to expand after the US imposed a suspension of oil trade with the sanctioned country by May 31, would need increased oversight by regulators and law enforcement, experts warned on Monday.

Venezuela’s national oil giant PDVSA intends to expand cryptocurrency transactions for its crude and gasoline exports as the United States reimposes oil sanctions on the country, sources told Reuters earlier this month. It is uncertain whether Washington would target payments in PDVSA’s digital currency Tether beginning June 1.

Venezuelan opposition leader Leopoldo Lopez and analyst Kristofer Doucette released a paper on Monday that detailed transactions since Venezuelan President Nicolas Maduro assumed power.

Democratic governments should oppose his attempts “to exploit cryptocurrency for moving illicit proceeds into the international financial system,” according to the study.

“Structures must be set up to combat this type of money laundering,” said Doucette, national security leader at Chainalysis, a New York-based provider of research and tools to governments, exchanges, banks, and insurance firms to guarantee safe bitcoin transactions.

The technology for digital transactions is continuously evolving, and transactions are rapidly increasing in developing nations such as Latin America and Africa, helping those who do not have access to the banking system. However, some corrupt administrations move quicker, making fraud prevention tougher, according to experts.

Doucette and Sigal Mandelker, a former US Treasury Department lawyer, stated at a Wilson Centre conference in Washington that the US government is working to tighten regulation and urge other nations to improve oversight.

(Adapted from ThePrint.in)

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