[2018-04-28] Venezuela Shuts Down Two Cryptocurrency Exchanges

[ivanpoldark]

The government of Venezuela has taken action against two cryptocurrency exchange operators in the country. Both of them allow customers to convert between a number of cryptocurrencies and bolivars and send remittances abroad.

Operation Paper Hands

The Venezuelan government’s “Operation Paper Hands” began a new phase this week “with the dismantling of 3 illegal remittance houses: Intercash, Rapidcambio, and Airtm,” according to the country’s Prosecutor General, Tarek William Saab. He described:

Operation Paper Hands is the largest anti-litigation procedure in the country’s history. So far 112 people have been arrested, of whom 107 have already been brought to court.

The operation “seeks to take action against individuals and companies that have incurred misappropriation, [and] dissemination of false information about the exchange rate,” he explained, adding that “1,382 bank accounts have been frozen in which a sum exceeding 711,967 million bolivars [~US$10.6 million] has been blocked.” Furthermore, he indicated that he has also requested the blockade of 247 bank accounts, 40 new arrest warrants, and 104 raids, according to a notice by the country’s Public Ministry.

Out of the three aforementioned exchanges, the latter two engage in exchanging between cryptocurrencies and bolivars. Airtm supports the conversion of zcash, bitcoin, bitcoin cash, ether, ripple, litecoin, monero, dogecoin, and tether. Rapidcambio allowed customers to exchange and send remittances using bitcoin, ether, bitcoin cash, dash, litecoin, and ripple.

Charges Against the Exchanges

Saab noted that these exchanges operate through websites registered abroad as well as Twitter accounts and other social networks, adding that they use international parent bank accounts in the U.S., Chile, Ecuador, and Panama. The crackdown, therefore, only affects their operations in Venezuela.

He elaborated, “In those accounts, they received deposits in cash or transfers, and then converted at a high and unreal exchange rate,” adding that “I have spoken with the President of the Republic to create new detention centers for these criminals.”

Efecto Cocuyo then quoted the Prosecutor General exclaiming:

I want someone to explain to me how in September of 2017 a dollar cost 15,000 bolivars; in December it was 100,000 bolivars; in January of this year 200,000 bolivars and at the end of March 500,000 bolivars.

Rapidcambio Shut Down

At the time of this writing, one of the exchanges above has already closed down. Rapidcambio posted a notice on its website stating that it has “always demonstrated its responsibility, honesty, seriousness and a true commitment to providing a service to all Venezuelans who are abroad.”

In addition, the company emphasized, “our company has never set or intended to fix market prices, our exchange rates have always been given by the law of supply and demand, as a free market without any imposition.”

Nonetheless, Rapidcambio concluded:

Unfortunately we are in need to close our operations indefinitely due to the unjust persecution to exchange houses in Venezuela by the National Government.

https://news.bitcoin.com/venezuela-shuts-down-cryptocurrency-exchanges/

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[InvoKing]

-snip-
“I have spoken with the President of the Republic to create new detention centers for these criminals.”

LoL, a country with too many problems, poverty, economic crisis...try to build a new detention centerS for people managing exchanges! That's hilarious.
Now, after creating their local cryptocurrency, they don't want people to trade it with fiat or other altcoins (abroad?), i am confused really.

[vit05]

Venezuela is a country downhill. The government has no idea what to do. It is clear that Bitcoin could become a threat to this dictatorship so they will do everything to stop it. For dictatorships, controlling money is as important as controlling people.

[hnq123]

IMHO, that move sounds more like coming from the "market" (central banks, IMF, WB) than from their local leaders. Obviously it was approved by government, but considering that a success of cryptocurrencies, descentralized, controlled by people, without regulation from "market", would gradually emancipate a country from a economic slavery, it sounds like politicals were bribed (or convinced) to approve such measure.

[bbc.reporter]

-snip-
“I have spoken with the President of the Republic to create new detention centers for these criminals.”

LoL, a country with too many problems, poverty, economic crisis...try to build a new detention centerS for people managing exchanges! That's hilarious.
Now, after creating their local cryptocurrency, they don't want people to trade it with fiat or other altcoins (abroad?), i am confused really.

It shows that they do not have control over their own financial system anymore. The banks in their country might also be trying to put pressure on the government to take action.

But it will not be long now. There will be a change of regime in Venezuela in 2 or 3 years.

[imsotiredofmoviereboots]

Venezuela is a very desperate country that hopes cryptocurrency will save them so I think that authorities are just blackmailing these exchanges to get a lot of money from their operation. 

[stompix]

IMHO, that move sounds more like coming from the "market" (central banks, IMF, WB) than from their local leaders.

Yeah right the evil FMI and WB are dictating Maduro what to do with cryptos... he, the poor innocent pink wabbit is not to blame.
https://www.telesurtv.net/english/news/Morales-Declares-Total-Independence-from-World-Bank-and-IMF--20170722-0020.html

Stop trying to blame others, it is just this socialist incompetent fault for everything.

It shows that they do not have control over their own financial system anymore. The banks in their country might also be trying to put pressure on the government to take action.

But it will not be long now. There will be a change of regime in Venezuela in 2 or 3 years.

The banks? Just as the guy above, stop blaming an invisible enemy when he is right in front of you.
Chavez has nationalized nine banks, Maduro three and he is threatening the remaining ones with the same.
No bank in Venezuela holds any power over their goverment.

[Qartersa]

This is definitely due to the influx of people of who wants to join in the bandwagon in the era of cryptocurrencies, and through it, create a business that is aimed at making money from people who know less about the subject. I believe the Venezuelan government has the right to shut off businesses of these kind. I hope people from all walks of life consider making money without having to ploy people into a belief that is wrong in the first place. I see here deception at its finest, and thus deserving of what has come to them.

And you know, regardless of how the Venezuelan government is doing economically, I think its government is doing a great job at ensuring that its people do not have to deal with businesses that have no legal right to exist in the first place.

[Jpja]

Perhaps they want their national cryptocurrency to be exchanged directly for US dollars? The question remains-who will risk to open such a trading platform in Venezuela after the US sanctions?