Wednesday, September 18, 2019

Venezuela Seeks to Thwart Crypto To Fiat Trading By Monitoring Accounts

The government of Venezuela has announced today that they will be monitoring bank accounts for “suspicious operations” that could indicate cryptocurrency to fiat exchanges. This with the objective of thwarting down capital flight losses via cryptocurrency transactions, that has been on the rise lately.

Venezuela had shown itself to the world as a cryptocurrency friendly country recently, even pioneering in the field of official state cryptocurrencies by launching the Petro. But now it seems that the tides have changed, and the government has made this clear, by tightening the controls around cryptocurrency trading and exchanging.

Tarek El Aissami, the Venezuelan vice-president, has announced that they will be monitoring exchanges that want to impose speculative cryptocurrency prices to allow people to trade cryptocurrencies for dollars and get them out of the country. When he talks about “speculative”, he means that cryptocurrencies are trading at the price of the black market dollar, a rate that is like thirty times higher than the fixed rate offered by the government officially.

He also announced that they will monitor all bank accounts of the financial system for cryptocurrency exchange operations, to evaluate and punish the culprits. About this, he stated:

“EVERY ACCOUNT IDENTIFIED THAT IS LINKED TO THE MARKET DISTORTION WILL BE SEVERELY PUNISHED, AND THE CULPRITS WILL BE BROUGHT TO JUSTICE”

Venezuela has tried to control their inflation and capital flight levels by imposing a strict exchange control, pegging the dollar at a fixed rate to the national official currency, the bolivar. But this has been unsuccessful, with levels of inflation skyrocketing and scarcity fueled by the rampaging devaluation. The truth is that most exchanges, apart from the ones sponsored by the government, will still exchange at the levels that the government calls speculative. So this might cause some exchanges and traders to go underground.

Related Article:  Barclays Analyst Predicts $19 Billion Revenue From Facebook Cryptocurrency by 2021

The Venezuelan authorities have already incarcerated traders in an operation called “Operación Manos de Papel” (Operation Paper Hands), when also directives of Banesco, a national bank, were detained for questioning.

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