Banks in Venezuela are keeping a strict eye on customer accounts that are involved in crypto-related activities, mostly crypto trading and with a focus on peer-to-peer (P2P) transactions.
A legal firm focused on blockchain and crypto in Venezuela, Legalrocks disclosed that the private banks in the country had blocked more than 75 accounts, as they facilitated fiat-to-crypto and crypto-to-fiat conversions since the end of the previous year.
It appears that Venezuelan banks have decided to increase their vigilance of accounts that are engaged in crypto transactions.
Legalrocks published a blog post in which it highlighted that since the end of last year, banks in Venezuela have either suspended or are investigating more than 75 accounts involved in these activities.
Chief executive of Legalrocks, Ana Ojeda, said that these accounts should not be blocked because they received fiat currency in exchange for the sale of a cryptocurrency.
But, she also clarified that this would change if there are sufficient indications that the funds that were used in the said transactions were generated via criminal or illegal activities.
Likewise, all transactions that are conducted via crypto exchanges, but without Sunacrip’s authorization should also be deemed suspicious by the financial authorities and they are free to launch an investigation.
Sunacrip is the national superintendency in Venezuela that monitors crypto assets.
According to Ojeda, it has become common for people to engage in stablecoin exchanges because of the economic situation and the immense amount of devaluation that the Venezuelan bolivar, the national fiat currency, has experienced.
P2P exchanges are used by people for stablecoin transactions and they consider them a store of value. Therefore, they buy them when they receive payment in fiat currency.
They also exchange the stablecoins for fiat currency once more when they have to buy goods and services.
Back in July, the United Nations presented a report, which showed that Venezuela was in the third position amongst countries that have seen a high amount of crypto adoption.
Ojeda said that Venezuela was one of the top countries in Latin America to have made use of cryptocurrencies the most in order to hedge against inflation and to ensure the value of savings do not decline.
As a matter of fact, the popularity of stablecoin P2P markets in the country has increased significantly, which has prompted many analysts to believe that they are playing a key role in the dynamics of the exchange rate of the Bolivar and the US dollar.
There was a 40% drop in the value of Bolivar against the greenback back in November. Many analysts had stated that the crypto market and the country’s economy were interconnected.
Therefore, the value of the Bolivar could have dipped because of the implosion of the crypto exchange FTX that also happened in November.
The downfall had spooked many investors and they were afraid of holding their funds on centralized custodial exchanges after the entire FTX fiasco occurred.