Uphold’s surprise withdrawal from Venezuela comes at a contradictory time. The platform for the exchange of bitcoin (BTC), cryptocurrencies and currencies reaffirmed to CriptoNoticias that it is leaving the country due to the sanctions applied by the United States, since 2017, to state entities and representatives of the national government.
Although the relationship between the governments of Joe Biden and Nicolás Maduro has hardened over the years, a recent relaxation in financial restrictions it appeared as a light at the end of the tunnel. However, this did not stop Uphold from deciding to leave the oil nation. The decision, before clarifying the panorama, would have precipitated it.
“The recent measures dictated by the Office of Foreign Assets Control (“OFAC”), dependent on the United States Department of the Treasury, have accentuated the complexity and difficulty of complying with the sanctions on Venezuela. Unfortunately, this has left us no choice but to suspend our operations in that country,” Uphold told CriptoNoticias.
When consulting Uphold about the possibility of restricting the service only to the entities or officials that appear on the OFAC list and not to the entire Venezuelan market, the company indicated that the magnitude of the sanctions makes it “highly complex to continue operating normally” in the country.
Uphold did state that the recent complaints about account blocking of Venezuelan users are not related to their exit from the local market. On this aspect the company reported:
“We are aware of the rumours, but there is absolutely no connection. There are many reasons why, being a regulated company, we may occasionally need to block certain accounts. These can range from discrepancies in the information provided, to the need to ensure that personal accounts are not used to run a business, or accounts are not duplicated using the same email address. This occurs in every market in which we operate. The decision to leave Venezuela was due to the increasing complexity of complying with the sanctions of the United States government.”
Venezuela and what it represents for Uphold
The Venezuelan market was one of the first to adopt Uphold’s services, according to the company itself. Regarding the number of active users and the transaction volumes that have been registered so far in 2022, the company preferred not to disclose data. Despite this, the platform estimates that Venezuela represents approximately 2% of the total volume of transactions of Uphold this year.
“The suspension of Uphold’s services for Venezuelan users, as unfortunate as it is, will not affect Uphold’s operations on a global scale, nor its current financial situation. Anyway, we are deeply sorry to leave the country. Venezuela was one of the first countries to welcome Uphold, and from that first moment the platform has been able to enjoy an active and loyal network of users”, highlighted the platform.
In the report Uphold’s transparency report states that the company has a global transaction volume of about $30 billion. If that figure is taken as a reference and the percentage related to Venezuela is applied, then it would be estimated that annually Around 600 million dollars were traded in the country. A figure that is neither official nor confirmed, but it serves to get an idea of the market.
Will Uphold return to Venezuelan lands one day?
When asked if the company would return to the country if the sanctions are lifted, Uphold was blunt in saying: “Without a doubt. We sincerely hope that this will happen.”
Uphold’s services, like that of other digital wallets or cryptocurrencies such as bitcoin, have been gaining popularity among Venezuelans for years. The reason is that the country has maintained since 2003, with certain relaxations, an exchange control in which the State was, in practice, the only entity with direct access to foreign currency. This encouraged users to use alternatives to traditional banks and exchange houses.
Currently, the Venezuelan government maintains exchange control, however, it has granted freedoms so that commercial establishments, or natural persons, trade with currencies such as the United States dollar, but paying more taxes.