On January 19, 2018, US Senators Marco Rubio (R-FL) and Robert Menendez (D-NJ) published an open letter addressed to Treasury Department Secretary Steve Mnuchin on the topic of international cryptocurrency oversight.
"We write to express our concerns regarding Venezuelan President Nicolás Maduro's purported development of a cryptocurrency for the explicit purpose of evading sanctions levied by the United States," wrote the Senators. "We have serious doubts about whether Venezuela has the capacity to launch a cryptocurrency, but regardless, it is imperative that the U.S. Treasury Department is equipped with tools and enforcement mechanisms to combat the use of cryptocurrency to evade U.S. sanctions in general, and in this case in particular."
Noting that Maduro has received support from Russia and China, the congressmen are "concerned that a cryptocurrency could provide Maduro a mechanism by which to make payments to foreign lenders and bondholders in the United States, actions that would clearly thwart the intent of U.S.-imposed sanctions."
ETHNews previously examined the potential use of cryptocurrency to skirt sanctions.
Rubio and Menendez suggested that "Maduro's actions and any corresponding response from the Department will be closely watched by foreign sovereign states like Russia and North Korea that have expressed interest in either developing their own sovereign-backed cryptocurrencies or exploiting other cryptocurrencies for nefarious purposes."
In their letter, the lawmakers included a series of six questions:
(1) Is the Department monitoring Venezuela's efforts to develop of a cryptocurrency?
(2) Under current authorities, does the Department have the ability to modify existing sanctions to limit the Venezuelan government's ability to circumvent sanctions using a new sovereign-backed or an existing cryptocurrency?
(3) What tools can the Department use to intercede in the event that Venezuela attempts to utilize a new sovereign-backed or an existing cryptocurrency to make payments to foreign lenders and bondholders in contravention of U.S.-imposed sanctions?
(4) Does the Department have effective enforcement mechanisms to follow and counter the use of cryptocurrencies?
(5) To what extent is the Department monitoring the development of sovereign-backed cryptocurrencies in other countries, including Russia and North Korea?
(6) To what extent is the Department monitoring possible nefarious uses of other cryptocurrencies by Venezuela, Russia, and North Korea?
The Senators asked Mnuchin to provide responses to their questions by the end of the month.