Nicolás Maduro’s regime in Venezuela has so far failed to tackle corruption that exists at every government level, chronic shortages of food and medicine, unemployment, growing human rights violations, and not to forget – the rampant hyperinflation.
At a time of such a massive scale of socio-economic and political crises, Venezuelans had turned to Bitcoin and other cryptocurrencies. But now the picture looks grim as the country saw yet another crucial cryptocurrency exchange exit amid stringent regulation.
The North American Bitcoin exchange, Paxful announced pulling out its operations from Venezuela citing strict regulations and the platform’s own risk tolerance that have proved to be a major setback for the P2P Bitcoin exchange as the reason for exiting.
A nuestra familia Paxful en Venezuela,
Hoy, nos entristece anunciar que Paxful dejará de operar en Venezuela.
Esperamos que haya otra oportunidad de ingresar a la región nuevamente en el futuro cercano. Este no es el fin.
El equipo de Paxful LATAM pic.twitter.com/sAkdKIg1Sb
— Paxful LATAM (@paxful_LATAM) September 14, 2020
Paxful’s departure from the country highlights a myriad of issues when it comes to operating a cryptocurrency exchange, something that has been associated with giving back the power to the people, in a country stricken with a bad economy among other crisis.
The platform had previously sent a notice to its customers in Venezuela that it will no longer allow trades using Bank of Venezuela due to US President Donald Trump’s sanctions against the country. The company had cited that its compliance team must adhere to the sanctions related to the Office of Foreign Assets Control [OFAC].
The OFAC, which is a department of the American Treasury, had recently imposed a new set of sanctions on firms involved in businesses with Venezuela and the Nicolás Maduro regime. Further, Paxful listed Venezuela as one of the OFAC sanctioned / high-risk countries.
The official page of Paxful also detailed
“As a US company, we comply with the penalties of the OFAC. OFAC is a division of the US Department of the Treasury that administers and enforces economic and trade sanctions based on US foreign policy and national security objectives against foreign countries and regimes, terrorists, international drug traffickers. , those involved in activities related to the proliferation of weapons of mass destruction and other threats to national security, foreign policy, or the economy of the United States.”