Shares 155 Views

Venezuela’s Biggest Bitcoin Exchange Halts Operations


A series of raids and detentions ignited fear and anxiety in the Venezuelan bitcoin community. Yesterday, Surbitcoin – the country’s largest exchange – was forced to halt operations after Banesco, the exchange’s main bank partner, decided to close the company’s accounts.

Turmoil brewed inside the local bitcoin community. Several police agencies in Venezuela made a series of raids across the country, the result: 10 citizens detained, and thousands of bitcoin mining equipment units confiscated.

Bitcoin users in Venezuela were still recovering from the events of last week when Banesco, the country’s largest private bank, announced the suspension of Surbitcoin’s corporate accounts. The exchange was criticized by its own users due to the fact that the announcement was made on a Facebook post. It took Surbitcoin 24 hours to inform its users via the exchange’s website about the closure of the corporate bank accounts.


Users of the platform rushed to withdraw their bolivars from the exchange, however, not all of them were able to do so, and they will need to wait “approximately two weeks” until the company is able to find another banking partner.

Surbitcoin has advised its users to shift to Localbitcoins for the purchasing and selling of digital currency.  At least two high-profile arrests were made in Venezuela regarding bitcoin mining operations in the last month, the first one, carried out by the Cuerpo de Investigaciones Científicas Penales y Criminalisticas (CICPC). The agency arrested 4 citizens which are now being formally charged with “electricity theft” and “Internet fraud”. Over 300 S4 Antminer units located in a warehouse in Charallave town were seized by the authorities.

In a second bust, the Policía Nacional Bolivariana (PNB), the country’s main police agency, seized what is being considered by some as the biggest Bitcoin mining operation in South America. Rodrigo Souza, the founder of Surbitcoin, expressed:

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.

The 11,000 mining units allegedly came from Poland. The Venezuelan authorities will argue in court that the citizens involved in the mining operation are part of an “international crime organization”. Further charges like “electricity theft”, “electronic fraud”, and “computer crimes”, could be pursued.

The landscape is looking grim for Venezuelans and the local bitcoin demand. Surbitcoin was the leading (and first) exchange in the country, with over 40 bitcoins per day in volume. The company entered operations in 2014, and user adoption started to increase after Surbitcoin began gifting small quantities of bitcoins to its customers.

Inflation, currency devaluation, and capital controls made bitcoin a safe haven for Venezuelans. The citizens will have to turn their heads at Localbitcoins, a platform with a transactional volume of about 290 bitcoins per week in Venezuela, showing that OTC trades are still the main form of currency exchange in the country.

If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.


You may be interested

Schnorr Signatures – Another step after SegWit
Bitcoin
shares26 views
Bitcoin
shares26 views

Schnorr Signatures – Another step after SegWit

Brian Evans - Jan 20, 2018

Signature aggregation is a very hot topic for most Bitcoin Developers, as they are trying to implement a way to help the network save resources, and improve…

Blockchain is making way for all companies
Crypto
shares35 views
Crypto
shares35 views

Blockchain is making way for all companies

Brian Evans - Jan 20, 2018

Everyone has had a genius business idea at some point or another. Most ideas come from looking around and identifying ways life could be made better. That’s…

Drone Saves Two Children from Drowning in Australia
Australia
shares33 views
Australia
shares33 views

Drone Saves Two Children from Drowning in Australia

Brian Evans - Jan 20, 2018

Drone technology has always been intriguing to industry experts and enthusiasts alike. In fact, it seems the idea of using drones in the real world may finally…

Most from this category

%d bloggers like this: