Venezuela banks block more than 75 crypto-related accounts

The accounts of consumers with connections to cryptocurrency trading, particularly those connected to peer-to-peer (P2P) transaction activity, have caught the attention of Venezuelan banks.

Venezuelan private banks have frozen over 75 accounts for enabling crypto-to-fiat and fiat-to-crypto transactions since the end of 2021, claims Legalrocks, a crypto and blockchain-focused law practice in Venezuela.

Banks in Venezuela are paying more attention to accounts that frequently involve bitcoin transactions. More than 75 cases of funds that have been stopped or are under investigation have been registered since the end of 2021, according to the blog post by Legalrocks, a Venezuelan law practice that specialises in cryptocurrencies and blockchain.

Ana Ojeda: The closure of these accounts is unjustifiable

According to Ana Ojeda, CEO of Legalrocks, shutting these accounts for collecting fiat money in exchange for cryptocurrencies can’t be justified. Nevertheless, she adds that if there are convincing indications that the money spent in these transactions is connected to unlawful or criminal activity, it changes the situation.

Similarly, Ojeda adds that financial authorities may deem transactions made via cryptocurrency exchanges which aren’t approved by Sunacrip (the national superintendency for cryptocurrency assets) suspicious.

Ojeda notes that owing to the economic crisis and the severe devaluation of the country’s fiat currency (the Venezuelan bolivar) this year, stablecoin transactions through P2P markets are widespread. This implies that stablecoins are used as a store of value by individuals, who buy them while receiving fiat money as payment and then exchange them for more fiat money to make purchases and pay for services.

Venezuela is toping the crypto charts

Venezuela ranks the third-highest among the nations that have adopted cryptocurrencies, per a report from the UN issued in July.

“As the Latam nation that uses cryptocurrency the most to defend itself against inflation and the decline of savings capacity, Venezuela has dominated the region for some years.”

Ana Ojeda, CEO of Legalrocks

In Venezuela, stablecoin-based P2P markets have grown so widespread and well-liked that some observers think they could significantly impact the fluctuations of the dollar-bolivar exchange rate.

Asdrubal Oliveros, an economist, suggested that the FTX collapse, the fear of storing assets on custodial exchanges, the interaction of crypto markets with the larger economy, and the bolivar’s 40% decline versus the US dollar in November as potential causes for the rise in crypto and stablecoin use.