Maduro Ran a Narco-Terrorist State in Venezuela – Did He Use Crypto Too?

Venezuela’s president, Nicolás Maduro, pleaded not guilty this week before a New York court over narco-terrorism charges. The news comes only five days after the United States captured him from the presidential building in Caracas.

In the digital asset space, the broader situation highlighted crypto’s dual nature. Its borderless, instant transactions offer lifelines to those in dysfunctional banking systems. Yet, the same features can enable illicit finance and sanctions evasion.

How US Courts Gained Jurisdiction Over Maduro

As reactions range from cautious hope for regime change to anger over US interventionism, the case against Maduro is now moving forward in the United States.

Questions initially arose over whether Maduro could be tried in a US court, given the circumstances of his capture. Ari Redbord, head of policy at blockchain intelligence firm TRM Labs, clarified that point.

A former federal prosecutor, Redbord told BeInCrypto that once a defendant is on US soil, American courts have jurisdiction to prosecute under US law.

“There is a long-held doctrine in US courts called the Ker-Frisbie doctrine, based on two cases. It essentially says a federal court’s jurisdiction over a defendant is not defeated by how that person was brought before the court. So even claims of abduction, or an irregular transfer, generally do not bar prosecution,” Redbord told BeInCrypto in a podcast episode. 

What matters now is focusing on the charges against Maduro and the evidence that proves them.

Evidence Behind Maduro’s Narco-Terrorism Charges

The indictment claims that Maduro and senior Venezuelan officials maintained close ties with international drug trafficking networks over the past two decades. 

Prosecutors alleged these relationships enabled the flow of illicit drugs into the United States while allowing those involved to profit personally.

According to Redbord, the evidence is overwhelming.

“What makes it different from a typical drug case is the abuse of official authority,” Redbord said. “The indictment is detailed. It describes how Maduro and his inner circle allowed the use of Venezuelan airspace and maritime routes to create an environment where cartels could engage in the drug trade freely.”

Given the frequent use of crypto to enable illicit finance, whether digital assets were used to facilitate Maduro’s alleged narco-terrorist state soon became a point of focus.

Crypto’s Role Beyond The Indictment

Crypto’s non-sovereign, borderless design has made it an attractive tool for bad actors seeking to avoid detection or bypass sanctions.

However, after reviewing the indictment in detail, Redbord told BeInCrypto that there is no evidence so far that Maduro or his inner circle relied on crypto to carry out their operations.

Nonetheless, he asserted that cryptocurrency has played a significant role in Venezuela in other ways.

According to a crypto adoption report by TRM Labs, Venezuela ranked 11th globally. A broken banking system, chronic hyperinflation, and strict capital controls have driven widespread reliance on digital assets.

“That’s why we see crypto used in everyday life in Venezuela in a way we don’t yet see in the US. In the US, it’s easy to access credit cards, Venmo, and other payment platforms. In Venezuela, stablecoins can function as a lifeline,” Redbord told BeInCrypto.

There have also been state-backed initiatives, although they have been unsuccessful. 

In 2018, Venezuela introduced the Petro, a state-backed cryptocurrency backed by oil. It was the first attempt by a government to deploy a crypto asset explicitly as a response to sanctions.

“Maduro was under increasing pressure from the US and partners and looked for ways to circumvent US dollar transactions. The Petro failed commercially and technologically, but it revealed a strategic shift: the regime was experimenting with crypto,” Redbord explained.

Although it failed at the government level, cryptocurrency continues to be used by everyday Venezuelans to get by in their daily lives.