Paxful is pulling out of Venezuela's peer-to-peer (P2P) bitcoin scene.
- "Increasingly strict" regulations hampered the P2P bitcoin exchange's ability to "provide services to Venezuelans," according to a video tweeted by Paxful Monday.
- A company spokeswoman confirmed the exit with CoinDesk. "Concerns regarding the regulatory landscape around Venezuela and Paxful's own risk tolerance" prompted the exit, she said.
- New Venezuelan account creation will be disabled and existing users will have 30 days to withdraw, according to an exit plan shared with CoinDesk.
- The departure will deprive Venezuela's underground crypto scene of its second-largest P2P outlet. Venezuela's crypto traders heavily favor P2P crypto exchanges like Paxful and market leader LocalBitcoins over government-approved alternatives.
- It also denies Paxful an emerging market it courted for years as the future of bitcoin adoption. Venezuela's rampant inflation, unbanked population and high mobile phone usage have long appealed to company CEO Ray Youssef.
- But those attractions weren't enough to overcome the myriad difficulties of operating in an economy as sanctioned and scrutinized as Venezuela's.
- In addition to Venezuela's internal cryptocurrency regulator SUNACRIP, the country's international exchanges also face potential troubles from financial sanctions levied by the U.S.
- Paxful blamed U.S. sanctions when it shut off trades involving the Bank of Venezuela in June.
- It was not immediately clear whether the regulatory uncertainty cited by Paxful was internal or external, perhaps due to U.S. sanctions.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.