The peer-to-peer exchange has requested that all of its users in Venezuela to withdraw their funds in the next 30 days. Notably, the withdrawals will be free of charge. However, Venezuelan traders who reside abroad will be able to continue trading on the platform.
Complying With the US Office of Foreign Asset Control
Paxful notified its customers in June this year that it will no longer support transactions conducted via the Bank of Venezuela. The move, the company said, was a response to the need to comply with the directives and sanctions issued by OFAC.
In a Twitter post in Spanish, the Paxful team noted that it will be ceasing its operations in relation to the regulations imposed by OFAC.
A nuestra familia Paxful en Venezuela,
Hoy, nos entristece anunciar que Paxful dejará de operar en Venezuela.
Esperamos que haya otra oportunidad de ingresar a la región nuevamente en el futuro cercano. Este no es el fin.
El equipo de Paxful LATAM pic.twitter.com/sAkdKIg1Sb
— Paxful LATAM (@paxful_LATAM) September 14, 2020
The regulatory landscape by OFAC restricts Americans from conducting business with the Venezuelan government. Furthermore, it also affects relations between government-owned businesses and the US.
All these have a negative impact on the operations of companies in the South American country. In addition, it affects business performance and earnings. The exchange then sent emails to all customers saying its goodbye.
Restrictions by the Venezuelan Government
Though Venezuela tops the list of sanctioned and high-risk states by the US, the move to terminate operations was also influenced by the Venezuelan government. Over the past two years, the Venezuelan authorities have placed restrictions and shut down numerous crypto exchanges.
The government suspended operations and banned users’ access to crypto exchanges including US exchange Coinbase and MercaDolar. This move by Venezuelan authorities affected the operations of many crypto exchanges serving users in a country experiencing hyperinflation.
Read Also: Coinbase Access Gets Blocked in Venezuela