TRM Labs warns venezuela crypto surge is reshaping the sanctions landscape

As U.S. pressure intensifies on Caracas, venezuela crypto usage has quietly become embedded in daily commerce, raising both humanitarian lifelines and new compliance concerns.

TRM Labs report on Venezuela’s growing dependence on digital assets

After nearly a decade of economic isolation and aggressive international sanctions, Venezuela is increasingly relying on crypto tokens to keep its economy moving, according to a new TRM Labs report. The study highlights how stablecoins, particularly Tether’s USDT, now play a central role in everyday transactions for ordinary Venezuelans.

Moreover, the research argues that crypto has become a critical workaround for a population facing a collapsed banking system and a rapidly devalued bolivar. That said, TRM stresses that these same mechanisms could carry significant sanctions evasion risks for the state and private actors.

“You can absolutely say that years of sanctions and loss of correspondent banking helped push both the state and the broader economy toward alternative rails,” said Ari Redbord, TRM’s global head of policy and a former U.S. Treasury official, in comments to Decrypt.

A double-edged sword for the Venezuelan economy

Redbord described the impact of digital assets on the Venezuelan economy as fundamentally ambivalent. On one hand, crypto has opened access to cross-border payments and savings tools for people cut off from traditional finance. On the other hand, it has also given authorities and connected elites new ways to move value outside the formal system.

He argued that the humanitarian benefits of wider access to stablecoins and other assets should still be supported. However, he added that U.S. policymakers must also find ways to limit venezuela crypto infrastructure when it is used “as a tool for sanctions evasion,” without harming legitimate users.

The report notes that in this fragile environment, stablecoins such as USDT are often perceived as more reliable than local currency balances. Moreover, they function as a de facto hedge against hyperinflation, salary erosion, and banking restrictions that many Venezuelans encounter daily.

Rise of informal peer-to-peer crypto markets

TRM highlights the rapid expansion of informal crypto markets in the country, driven by platforms that enable direct user-to-user trading. These services typically have minimal KYC procedures and operate largely outside the domestic banking system, which makes them attractive but difficult to supervise.

The blockchain intelligence firm found that a single peer-focused website recently accounted for 38% of all web traffic originating from Venezuelan IP addresses. However, such dependence on a largely unregulated platform magnifies financial integrity concerns, especially when combined with opaque liquidity sources and cross-border flows.

According to TRM, informal peer to peer crypto trading, combined with hybrid intermediaries that sit between local banks and offshore venues, can create complex transaction chains. Moreover, when those flows involve high-velocity stablecoin transfers across multiple blockchains, authorities may struggle to detect patterns linked to sanctions evasion.

Banking restrictions and Operation Choke Point echoes

The report also references a preliminary review from the Office of the Comptroller of the Currency on how U.S. banks treat digital asset businesses. A survey of the nine largest national banks showed they restricted or denied services to clients based on lawful industry categories such as crypto, rather than on specific financial risk indicators.

That approach has revived concerns over “Operation Choke Point,” a 2013 Justice Department initiative that allegedly pressured banks to classify certain lawful industries as high-risk. However, this dynamic also pushes more activity toward offshore or informal venues, where transparency and compliance standards are often weaker.

In the Venezuelan context, such de-risking can further entrench peer-led trading channels and stablecoin usage, as domestic institutions become less willing or able to serve crypto-related clients. Moreover, it complicates global due diligence, since more value migrates to platforms beyond direct regulatory reach.

Regulatory fragility and SUNACRIP’s limitations

Venezuela does have a formal crypto watchdog, SUNACRIP, tasked with overseeing digital asset activity and related service providers. TRM notes, however, that the agency has faced corruption scandals and repeated restructuring, which have undermined its effectiveness and credibility.

These sunacrip regulation challenges have left a fragmented oversight framework, where enforcement is inconsistent and market participants often operate in a legal gray zone. Moreover, weakened supervision increases the risk that state-aligned actors or private networks use crypto to bypass existing sanctions controls.

TRM’s analysis suggests that while SUNACRIP was created to centralize governance of the sector, institutional instability has instead fueled parallel, less transparent markets. That said, any future reforms would need to balance tighter controls with preserving humanitarian access to remittances and savings tools.

Early blockchain experiments and the Petro’s demise

Venezuela was among the first countries to experiment with a state-backed crypto asset. In 2018, the government launched the Petro, a token purportedly backed by national oil and mineral reserves, to serve as an alternative to the collapsing bolivar.

The Petro quickly became controversial, both domestically and internationally. Moreover, it sat at the heart of political confrontation between President Nicolás Maduro and his opposition, which questioned the asset’s backing, transparency, and legality under existing constitutional rules.

After years of dispute and limited adoption, the Petro was officially discontinued in 2024, according to TRM. That said, the experiment entrenched digital assets in Venezuelan policy thinking and encouraged citizens to explore other cryptocurrencies and stablecoins beyond the failed state initiative.

Escalating U.S.–Venezuela tensions and sanctions dynamics

Recent geopolitical developments have added urgency to TRM’s warnings. In the past months, the White House has sharply escalated its standoff with Caracas, including new enforcement actions tied to Venezuela’s oil sector and maritime trade.

U.S. officials have toughened their rhetoric, and President Donald Trump recently refused to rule out deploying American troops to overthrow the Maduro government. Moreover, on Wednesday, Washington seized a sanctioned oil tanker off the Venezuelan coast, described as a “serious escalation” in bilateral tensions.

Against this backdrop, the trm labs report argues that expanding surveillance of digital asset networks connected to Venezuela will likely become a priority for U.S. regulators. However, pressure campaigns must account for the fact that crypto also props up basic commerce and household survival in the country.

Implications for global compliance and future policy

For international exchanges, banks, and analytics firms, Venezuela’s experience offers a test case in managing digital assets under heavy sanctions. Moreover, it shows how quickly a population can normalize stablecoin usage once traditional rails falter or become politically constrained.

TRM concludes that any response will need to distinguish between humanitarian flows, such as remittances or small retail transactions, and sophisticated networks that might rely on a peer-to-peer crypto exchange model to obscure oil or state-linked revenues. That said, clear guidance and coordination among regulators, including in the U.S. and allied countries, will be crucial.

In sum, Venezuela’s shift toward crypto currency as a daily tool has intertwined the country’s economic survival with emerging financial technologies. As us venezuela tensions deepen and sanctions expand, oversight of these digital rails will become a central arena in the broader geopolitical confrontation.