Xapo announces cessation of operations of its Bitcoin online wallet for Venezuela

Last Updated: 8 January 2024

The Bitcoin Xapo purse announced that it will leave until the end of 2020 an opportunity for Venezuelan residents to withdraw their funds to an outside provider.

Xapo recently announced that it will close its Bitcoin Era review online wallet services in Venezuela. Through an e-mail campaign, at the end of October 2020, the platform communicated to Venezuelan users the measure taken by the company, as well as the closing of all accounts in that Latin American country, due to the launch of a banking platform with international regulations.

The bitcoin Xapo online digital wallet, claimed that the measure is part of a transition process in operational changes, which is being undertaken by the company with a view to a forthcoming launch of the new banking platform that is attached to international regulations, which will replace the current platform.

“Unfortunately, we will not be able to continue providing services in your country”, stated the message issued by the platform to each of the users of Xapo in Venezuela, adding that their accounts in the wallet were closed.

Bitcoin’s Google searches are on the rise in Cuba

He also indicated via email that Venezuelan users have until December 31st of this year to withdraw their Bitcoin funds from their Xapo account to an external private key storage service, that is, to a Bitcoin address that is not related to the platform.

The company added that it is available, through its technical support team, to support those users who require help to withdraw their BTC funds from Xapo to other digital purses.

According to the digital newspaper Bitfinanzas, Xapo also mentions in its press release that the new service “will replace the existing product”, however, it is not clearly mentioned if the Latin American country will be left out of its new regulated banking platform.

It also points out that; apparently, this measure obeys the new regulations to which BTC’s online wallet must be submitted, in order to become a digital bank, which prevents it from providing financial services to countries with sanctions by the Office of Foreign Assets Control (OFAC) and Venezuela is among the countries that have suffered this sanction by the United States.

Crypto” sector affected in Venezuela

According to the analysis firm Chainalysis, Venezuela is in third place in the Global Index of Cryptomoney Adoption. The country has been living for several years the worst economic crisis in its history, with the Bolivar (local currency) practically worthless.

However, offering support to the Venezuelan people is becoming more and more complicated for companies providing crypto-currency services. In this way, Xapo joins the long list of service operators that are ceasing their functions in Venezuela, due to the regulations applied by the United States.

Less than two months ago, Paxful, the second Bitcoin P2P exchange platform, also announced to its Venezuelan users via email, its forced closing of operations, assuring that it was very risky to offer services to clients in the Caribbean country being regulated by the United States, which hinders the services of this platform for Venezuelans.

“Due to concerns about the regulatory landscape around Venezuela and Paxful’s own risk tolerance, we regret to inform that Paxful will cease operations in Venezuela,” the platform said in its official blog. It also mentioned that, “We made our best efforts for several months, but with the current risks, we had no choice but to make this incredibly difficult decision,” it said.

DAI as a savings option and refuge from inflation in Latin America

An example of this effort has been the initiative to eliminate, by mid-year, the payment option with Banco de Venezuela and the exchange of oil in its platform, due to the sanctions issued by OFAC against the regime of Nicolás Maduro, current president of that region.

As with the Xapo platform, Venezuelans had the opportunity to withdraw their funds from BTC. After the measure went into effect, Paxful gave its users 30 days to withdraw their funds from the platform to external services, which enjoyed the benefit of being free of commissions.

Likewise, it is important to highlight that the decision of the Paxful platform did not affect Venezuelans living abroad.

In addition to Xapo, other companies in the sector have stopped offering services to the inhabitants of that country, such as Pyoneer, Transferwise and the massive electronic transfer service

  • Florian Feidenfelder

    Florian Feidenfelder is a seasoned cryptocurrency trader and technical analyst with over 10 years of hands-on experience analyzing and investing in digital asset markets. After obtaining his bachelor's degree in Finance from the London School of Economics, he worked for major investment banks like JP Morgan, helping build trading systems and risk models for blockchain assets.

    Florian later founded Crypto Insights, a leading research firm providing actionable intelligence on crypto investments to hedge funds and family offices worldwide. He is the author of the bestseller "Mastering Bitcoin Trading" and has been featured in prominent publications like the Wall Street Journal, Bloomberg, and Barron's for his insights on blockchain technologies.

    With extensive knowledge spanning the early days of Bitcoin to today's explosive DeFi landscape, Florian lends his real-world expertise to guide both new entrants and seasoned professionals in capitalizing on the wealth-creating potential of crypto trading while effectively managing its inherent volatility risks.

error: Alert: Content is protected !!