- Paxful no longer provides services to users in Venezuela.
- It cites strict regulations from the Office of Foreign Assets Control of the United States Treasury Department.
- The exchange had previously restricted Venezuelan customers from making certain transactions.
This morning, Venezuelan users of Paxful, a North American Bitcoin exchange, received an email in which the platform thanked them for using it and said goodbye.
“Due to concerns about the regulatory landscape surrounding Venezuela and Paxful’s own risk tolerance, we regret to report that Paxful will cease operations in Venezuela,” the platform said in a statement shared with Decoding“We’ve been doing our best for months, but with the current risks, we had no choice but to make this incredibly difficult decision.”
If the situation changes, Paxful points out, it can start offering services in the country again.
The platform had acted in the past to restrict the activities of Venezuelans. This summer it is prohibited the use of Banco de Venezuela accounts– the largest bank in the country. Later, it banned the use of Petros or any other transaction between exchanges supporting the state-sanctioned cryptocurrency.
In a Twitter post, Paxful’s team clarified that the tough regulation it refers to does not originate in Venezuela, but is instead related to the Office of Foreign Assets Control (OFAC), part of the US Treasury Department.
OFAC sanctions against Venezuela prevent Americans from doing business with the Venezuelan government or government-owned companies, as well as a litany of other things. They also add paperwork for financial institutions in the country.
The regulatory cost may not have been worth it for Paxful, who doesn’t do that much business in the country. According to data from Useful Tulips, while LocalBitcoins moved more than $ 4.5 million in Venezuela last week, North American exchange reported less than $ 25,000 dollars.
However, other exchanges have a different willingness (and budget) for risks. Several new options have started offering their services in Venezuela – from centralized exchanges such as Binance to decentralized trading platforms such as HodlHodl.