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This Platform Claims to be Venezuela’s First Regulated Bitcoin Exchange

As previously reported by CCN.com, Venezuela is a country in which bitcoin has become a necessity for some, as it allows people to buy goods ...

Last updates by
Francisco Memoria
June 17, 2017 5:54 PM

As previously reported by CCN.com, Venezuela is a country in which bitcoin has become a necessity for some, as it allows people to buy goods and services they would otherwise be unable to. According to one Redditor, the cryptocurrency is even helping his family survive.

Venezuela’s problems came in early 2014, when hyperinflation struck the country’s economy. Since then, bitcoiners have been having a hard time in the country, as Venezuela’s state-owned internet service provider CANTV blocked several bitcoin-related websites and mining pools in the past. Mining centers have been taken down, and the country’s leading bitcoin exchange, SurBitcoin, even had to temporarily shut down operations after Banesco bank closed its account.

Recently, a new bitcoin exchange dubbed Monkeycoin, with its claim to fame being government permission to operate fully, meaning the exchange cooperates with authorities on issues like KYC (Know-Your-Customer) and AML (Anti-Money Laundering). It’s regulated by Sudeban, the country’s banking regulator.

Local cryptocurrency publication DiarioBitcoin recently contacted Sudeban, who told said “there was no authorization on their end”. The publication also caught up with the exchange’s representatives for an interview.

During the interview Monkeycoin revealed they are the first exchange to obtain a mercantile registry, meaning the company has been registered in compliance with the country’s laws, and doesn’t have to hide anything.

Monkeycoin representatives claim to have realized that the vast majority of Venezuelans had limited options when it came to buying goods and services abroad. After doing some research, they found draglet’s Exchange Software, and built the exchange with it.

The software allows Monkeycoin to use a Distributed Shared Orderbook (DSO), connecting it to a global network of exchanges that ensure there’s a healthy order book. It’s owned by a team of Venezuelan entrepreneurs who want to help the country’s population survive.

Thanks to draglet’s software, the exchange has access to integrated wallets and guarantees 99.9% uptime, software that covers all languages, and security for its users. According to DiarioBitcoin, bitcoin’s price in the exchange is equal to the price on peer-to-peer exchange LocalBitcoins, being one bitcoin worth over 19 million Venezuelan bolívares.

Monkeycoin on Venezuela’s Bitcoin Crackdown

Monkeycoin claims miners have been arrested in Venezuela because they were stealing electricity to mine bitcoin. In some cases, mining equipment was illegally shipped into the country. The representatives stated (translated statement):

We know cases in which users imported equipment via door-to-door services and this is what makes it illegal, since there is no payment record of customs duties, and under the effects they are obviously committing tax evasion offenses

Regarding SurBitcoin’s bank problems, Monkeycoin stated that they have never been duly registered and, as such, are breaching commercial and tax legislations.

According to the company’s representatives, Monkeycoin is registered for the purchase and sale of digital assets, an activity that currently lacks legal framework in Venezuela, which was said to be penalizing the company. It is also currently awaiting statements from several state organizations.

Community reactions

On social media, some bitcoiners remain skeptical of Monkeycoin’s relationship with the government, as some claim Venezuela wants to crack down on digital currencies, not support businesses associated with them. Some even claim that the exchange puts bitcoiners’ privacy at risk and may be a way for the government to reach them

On the other hand, some believe this is the first step towards the creation of legal framework for bitcoin and other digital currencies in Venezuela, although it is still too soon to draw conclusions, as the exchange is still in its infancy. In a conversation with James Ash, Monkeycoin owner Gabriel Giannitsopoulos revealed that in the first 48 hours the exchange already had over 300 registered users.

Featured image from Shutterstock.