Xapo recently announced that it would end its online bitcoin wallet services in Venezuela. As part of an email campaign at the end of October 2020, the platform informed Venezuelan users about the measures taken by the company, as well as the closure of all accounts in this Latin American country due to the launch of a banking platform with international regulations.
Bitcoin online digital wallet Xapo has alleged that the move is part of a transition process in operational changes the company is undertaking in view of the upcoming launch of the new banking platform, which is tied to international regulations.that will replace the current platform.
“Unfortunately we cannot provide any further services in your country”, draws attention to the message issued by the platform to every Xapo user in Venezuela, adding that their accounts in the wallet have been closed.
He also stated via email that Venezuelan users have until December 31st this year to withdraw their money in Bitcoin from their Xapo account. to an external private key storage service, ie to a Bitcoin address that is not related to the platform.
The company added that it is available through its technical support team to assist users who need help withdrawing their money in BTC from Xapo to other digital wallets.
According to the digital newspaper Bitfinanzas, it is highlighted that Xapo also mentioned in its statement that the new service “will replace the existing product”. However, there is no clear mention of whether the Latin American country will be excluded from its new regulated banking platform.
It is also said that; apparently, This move is due to the new regulations that the BTC online wallet must be subject to in order to become a digital bank preventing it from funding countries with Office of Foreign Assets Control (OFAC) sanctions. and Venezuela is among the countries that have suffered this sanction from the United States.
Venezuela’s crypto sector affected
According to the analysis company Chainalysis, Venezuela ranks third in the global index for the introduction of cryptocurrencies. The country has experienced the worst economic crisis in its history in several years, with the bolivar (local currency) being practically worthless.
However, it is becoming more and more complicated for companies offering cryptocurrency services to offer support to the Venezuelan people. So, Xapo joins the long list of service providers who are discontinuing their functions in Venezuela due to the regulations in force in the USA.
Less than two months ago roughly Paxful, the second Bitcoin P2P exchange platform, also mailed its Venezuelan users to announce the forced closure to ensure that it was very risky to offer services to customers of the US-regulated Caribbean country. who hinders the services of this platform for Venezuelans.
“Due to concerns about the regulatory landscape in Venezuela and Paxful’s own risk tolerance, we regret to announce that Paxful will cease operations in Venezuela.” said the platform on its official blog. He mentioned that too“We did our best for several months, but given the current risks, we had no choice but to make this incredibly difficult decision.“He said.
Proof of these efforts was the initiative to cancel the payment option with the Bank of Venezuela and the exchange of Petros on their platform by the middle of the year due to the sanctions imposed by the OFAC on the regime of current President Nicolás Maduro in that region.
As with the Xapo platform, Venezuelans had the option to withdraw their BTC funds. After the measure went into effect, Paxful gave its users 30 days to withdraw their money from the platform for external services, which had the advantage of being commission-free.
It should also be emphasized that the decision of the Paxful platform had no impact on Venezuelans living abroad.
In addition to Xapo, other companies in the industry are no longer offering services to residents of the country, such as Pyoneer, Transferwise, and the massive electronic dollar transfer service Cell under the Wells Fargo platform.
Xapo is a startup founded in 2013 by Argentines Wences Casares and Federico Munrrone, which operates one of the most important and most widely used Bitcoin wallets in the world and has its own exchange or exchange house for buying and selling Bitcoin.
In Venezuela in particular, Xapo was one of the pioneering platforms in that country in the cryptocurrency space, offering its users Bitcoin purchase options through their bank accounts in Bolivar.
In 2016, the company began offering its service of buying and selling Bitcoin with Bolivar through trusted third parties, and became an expanded option the following year along with Surbitcoin, which was present in the crypto ecosystem and with Localbitcoins.
The platform decided last year to sell its custody service to Coinbase. After talking to Fidelity and focusing on other initiatives, as Xapo’s main interest has always been the retail market.
“It is difficult to have a good consumer business and an institutional business at the same time,” said Wences Casares, founder and CEO of Xapo.
The $ 55 million acquisition is the result of Coinbase’s strong desire to expand its custody services. However, Xapo retains ownership of the trading business.
Recently, the platform made the largest bitcoin transfer in terms of mobilized fiat. More than $ 150 million left one of his wallets in an unknown destination and paid only the $ 3.58 commission for which he drew social attention.