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October 30, 2020
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Bitcoin Paxful P2P Exchange Closes Operations in Venezuela to Meet U.S. Sanctions

It’s the end of Paxful in Venezuela

The Point-to-Point (P2P) cryptocurrency exchange Paxful is closing its operations in Venezuela, apparently to comply with US economic sanctions against the leftist government of disputed President Nicolás Maduro.

On Tuesday, a Paxful spokesman told news.Bitcoin.com that the exchange will start restricting new accounts and closing old ones as part of the closure process.

“Current users will have 30 days to withdraw their funds without fees and will be notified directly by e-mail on how to do so,” said the spokesman, in a statement released by e-mail. “Venezuelan users who have completed the address verification that confirms that they are living abroad will be able to continue trading on Paxful.”

The American exchange says the decision “comes with great disappointment”, but it had to protect itself against potential punitive results in its worldwide operations. She cited strict regulations the Office of Foreign Assets Control (OFAC) of the US Treasury Department. The spokesman explained:

“Due to concerns about the regulatory landscape around Venezuela and Paxful’s own risk tolerance, we regret to inform you that Paxful will cease operations in Venezuela. We made our best efforts for several months, but with the current risks, we had no choice but to make this incredibly difficult decision. ”

The United States does not recognize Maduro’s government after a disputed election in 2018. Instead, it considers opposition leader Juan Guaido as the legitimate president of the Latin American country due to his position as president of parliament. Under OFAC sanctions, US citizens are prohibited from doing business with the Venezuelan government or state-owned companies, among other restrictions.

Matt Ahlborg, the creator of crypto analysis firm Useful Tulips, said U.S. sanctions against any country should accelerate Bitcoin adoption. He tweeted: “The US compliance charges are equivalent to the idea that it is‘ better to block a million good users than to let a bad user in! ’. That’s why we use Bitcoin. ”

Apparently, Useful Tulips data show that business was scarce for Paxful in Venezuela. In the past seven days, only about $ 25,000 in BTC has switched hands on the platform, compared to $ 4.5 million traded at rival Localbitcoins in the same country.

Paxful had previously restricted Venezuelan customers from making certain transactions. It banned the use of Banco de Venezuela accounts a few months ago and subsequently avoided transactions involving the use of Petro, a government-issued cryptocurrency.

The exchange said that if things change in relation to Venezuela, it will start offering its services again. “We sincerely hope that Paxful will have another opportunity to re-enter the region in the near future,” he said.

Source: Bitcoin.com

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