Saying goodbye to its Venezuelan users, Paxful claims that it was too risky to keep proposing services within the South American country.
Just recently, the Venezuelan users of Paxful, a North American Bitcoin exchange have received an email that is thanking them for their use and is saying goodbye.
“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,” said the platform in a shared statement, “We made our best efforts for several months, but with current risks, we had no choice but to make this incredibly difficult decision.”
Paxful indicates that if the situation changes, they can start giving services again in the country.
In the past, the platform had acted to restrict the activities of Venezuelans. Recently this summer, it banned the use of accounts from Banco de Venezuela, the country’s largest bank. And then, they later have forbidden the use of Petros and any other transaction between exchanges that support the state-sanctioned cryptocurrency.
Paxful’s team has clarified that the regulations that they were referring to aren’t from Venezuela but are instead related to the Office of Foreign Assets Control (OFAC), a part of the US Department of the Treasury.
OFAC has sanctioned against Venezuela that prevents Americans from doing business with the Venezuelan government or government-owned businesses also the litany of other things. They have also added paperwork for financial institutions in the country.
The stated regulatory costs may not have been worth it to Paxful, it doesn’t do that much business in the country. A data from Useful Tulips says that while LocalBitcoins moved more than $4.5 million last week in Venezuela, the North American exchange has reported a business of less than $25,000.
However, other exchanges have a different appetite and budget for that risk. Several new options have started offering their services in Venezuela – from centralized exchanges like Binance to decentralized trading platforms like Hodl.