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Paxful, the peer-to-peer (P2P) cryptocurrency exchange platform, will soon be shutting down its operations in Venezuela. As part of its closure, clients of the platform are given 30 days to withdraw their crypto funds from the exchange.
On Tuesday, September 15, 2020, a spokesman for Paxful confirmed that the cryptocurrency exchange will be shutting down its Venezuela operations, according to Bitcoin.com. In fact, the platform is no longer opening new accounts as part of its shutdown procedures.
Meanwhile, existing users are given up to a month to withdraw their crypto funds from the platform. For Venezuelans who are living outside the country, they can still continue using their Paxful accounts but they need to undergo a confirmation process.
“Current users will have 30 days to withdraw their funds without fees and will be notified directly via email on how to do so,” the company’s spokesperson said in a statement. “Venezuelan users who have completed address verification that confirms they are living abroad will be able to continue trading on Paxful.”
The company cited the strict regulations from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) as the reason for the shutdown of its operations in Venezuela.
“Due to concerns regarding the regulatory landscape around Venezuela and Paxful’s own risk tolerance, we regret to report that Paxful will be ceasing operations in Venezuela,” the company’s spokesperson added. “We made our best efforts for several months but with current risks, we had no choice but to make this incredibly difficult decision.”
The U.S. does not recognize the government led by President Nicolas Maduro. Instead, it views Juan Guaido, the leader of the opposition as the legitimate president.
A recent Chainalysis study revealed that Venezuela has the third-highest cryptocurrency usage in the world. The blockchain data analytics firm’s Global Crypto Adoption Index report explained that the country’s high inflation rate - the highest in the world – has forced its citizen to ditch fiat and place their wealth on cryptos to preserve their purchasing power.
“Venezuela is suffering through one of the worst economic crises in modern history, with its national currency, the bolivar, becoming practically worthless,” Chainalysis wrote. “Under these circumstances, cryptocurrency has taken on an important role in Venezuela’s economy … As the Venezuelan bolivar has lost value in the midst of hyperinflation, Venezuela has become one of the most active cryptocurrency trading countries on earth.”
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