Surbitcoin On Hiatus Amid Venezuela Bitcoin Crackdown

On February 3 the Venezuelan Bitcoin exchange Surbitcoin informed its customers services would be suspended temporarily. According to the exchange, Surbitcoin’s banking partner, Banesco, closed the firm’s account. The news comes shortly after the recent crackdown on Venezuelan Bitcoin mining activities in the region.

Also read: SEC Begins Soliciting Comments On Bitcoin Investment Trust

Uncertainty Towards Bitcoin in Venezuela Leads to Surbitcoin Shut Down

A lot of people were hoping the struggling citizens of Venezuela could use Bitcoin to escape the country’s economic crisis. For a short period, this seemed to be the case as headlines reported underground mining operations, stories of residents using Bitcoin for remittances, and the country’s Localbitcoins’ volumes exploding. Furthermore, Venezuelan interest in the digital currency could also be seen rising on Google search engines as queries grew significantly over the past few months.

However, over the past couple of weeks, the socialist government has seemed to take issue with certain Bitcoin-related activities. At the end of January, law enforcement within the region cracked down on Bitcoin mining operations, citing “electricity theft” in both instances. One of the largest Bitcoin exchanges, Surbitcoin is having problems with its banking services as its bank suspended the company’s account. According to the exchange, the company had always faced significant obstacles with the Venezuelan bank. Surbitcoin told customers it expects “to resume operations in approximately two weeks.”

Prior Issues With Banesco Bank

This isn’t the first time Surbitcoin had to cease operations as the exchange temporarily shut down this past July. The exchange at the time was trading at 22% below market volume and the startup explained Bolivar operations were halted due to issues with Banesco. According to a roughly translated statement from Surbitcoin at the time, Banesco bank suspected an individual was committing fraud. The exchange’s account was abruptly shut down, but no specific reasons were detailed.

“Dear customer, yesterday we received a communication from the management of Banesco where we are informed that our bank account will be closed,” stated SurBitcoin.

The Venezuelan exchange has told its customers they should immediately withdraw their Bolivars. Furthermore, Surbitcoin has told its clientele for the time being they should use the peer-to-peer marketplace Localbitcoins until business resumes. Localbitcoins’ volumes in the country have continued to remain very high during January.

‘Triggered a Reaction’

For now, accessibility to Bitcoin seems to be getting harder and speculation of government intervention run rampant in Venezuela. According to the founder and CEO of Surbitcoin, Rodrigo Souza, the temporary closure of the company may have something to do with the eight Bitcoin miners arrested over the past two weeks.

“When it was found that there were 11,000 mining computers consuming the energy to power a whole town at a time when there are severe electricity shortages, it triggered a reaction,” Souza explained. “We were not contacted by the government, but our bank is revoking our account because it doesn’t want to be involved. We are currently reaching out to other banking partners.”

What do you think about the recent events concerning cryptocurrency in Venezuela? Let us know in the comments below.

Images courtesy of Shutterstock, Surbitcoin, and Pixabay. 

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