Experts, politicians call for scrutiny of Venezuela's use of cryptocurrency

(Reuters) - Venezuela's use of digital currencies, expected to increase after the United States ordered a wind-down of oil deals with the sanctioned country by May 31, will require greater scrutiny by regulators and law enforcement, experts said on Monday.

Venezuela's state oil company PDVSA plans to increase cryptocurrency transactions for its crude and fuel exports as the U.S. reimposes oil sanctions on the country, sources told Reuters earlier this month. It is unclear if payments in digital currency Tether by PDVSA will be targeted by Washington from June 1.

Venezuelan opposition politician Leopoldo Lopez and expert Kristofer Doucette presented a report on Monday detailing transactions since Venezuelan President Nicolas Maduro took office. Democratic governments should counter his attempts "to exploit cryptocurrency for moving illicit proceeds into the international financial system," the report said.

"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 software to governments, exchanges, banks and insurance firms to secure safe transactions with cryptocurrency.

Technology for digital transactions is changing fast and transactions are rapidly growing in developing regions including Latin America and Africa benefiting people without access to the banking system. But some corrupt governments are moving faster, making it difficult to prevent fraud, the experts said.

Doucette and Sigal Mandelker, a lawyer who previously worked at the U.S. Treasury Department, said during a conference organized by the Wilson Center in Washington that the U.S. administration is making efforts to increase regulation and encourage other countries to improve supervision.

(Reporting by Marianna Parraga; Editing by Richard Chang)