The leading Bitcoin exchange in Venezuela, SurBitcoin has announced a temporary suspension of its service. The disruption of service, happening for the second time in less than a year is due to the refusal of its banking partner to continue offering banking services.
SurBitcoin had issued a notice to all its customers asking them to withdraw their fiat and Bitcoin balance on February 3. According to reports, Banesco – SurBitcoin’s banking partner has not offered any explanation for the discontinuation of service.
The recent developments are said to be part of the Government’s crackdown on alternate currencies amid growing inflation. As a part of the wider crackdown, the law enforcement authorities recently arrested 8 Bitcoin miners on charges of power theft and cyber crimes. The arrests also led to the confiscation of over 11,000 Bitcoin mining equipment.
The increasing usage of Bitcoin among Venezuelans to meet their basic needs is responsible for government’s hostility towards the digital currency. With inflation predicted to cross 1600% soon, the country currently has a scarcity of essential goods and medicines. People are holding their earnings in Bitcoin instead of Bolivar to prevent further fall in its value. Also, the ease of transaction offered by Bitcoin is being utilized to order and pay for the goods on international e-commerce portals as the domestic ones are running empty. People can either choose to pay with Bitcoin-powered debit cards or buy prepaid/gift cards through digital currency payment and then redeem the same over some of the leading e-commerce platforms.
There are also reports of cases where the Bitcoin community is making cryptocurrency contributions to the affected, with the intention of alleviating their suffering. The situation is expected to grow worse as there is no end in sight for the ongoing economic meltdown.
SurBitcoin hopes to resume business in the next two-three weeks, once it manages to identify a willing banking partner. The company’s forecast is based on its previous experience in July 2016, when Banesco froze its bank accounts. At that time, SurBitcoin suspended all fiat operations for about two weeks after somebody reported the company to the bank’s Department of Safety and Security. The bank reinstated the service following an investigation that cleared the company of wrongdoings.
Ref: SiliconAngle | Image: Shutterstock