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Venezuela Shuts Down Two Cryptocurrency Exchanges

Venezuela Shuts Down Two Cryptocurrency Exchanges

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.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

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.

Venezuela Shuts Down Two Cryptocurrency Exchanges
Venezuela’s Prosecutor General, Tarek William Saab, talking about Operation Paper Hands.

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.

Venezuela Shuts Down Two Cryptocurrency Exchanges

Venezuela Shuts Down Two Cryptocurrency Exchanges

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

Venezuela Shuts Down Two Cryptocurrency ExchangesAt 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.

What do you think of Venezuela shutting down these exchange operators? Let us know in the comments section below.

Images courtesy of Shutterstock, Rapidcambio, Airtm, Vtv Canal8, and the Venezuelan government.

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Tags in this story
airtm, Arrest, Bitcoin, crypto, Cryptocurrency, Digital Currency, Exchanges, Government, N-Economy, Nicolas Maduro, operation, paper hands, rapidcambio, remittances, shut down, Venezuela, venezuelan, Virtual Currency
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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.