Initially revealed on August 2, 2018, several Venezuelan Coinbase users abruptly lost the ability to withdraw or send cryptocurrency, prompting speculation that the exchange may have its hands tied by US-Venezuela sanctions.
Purportedly, Venezuela-based Coinbase users are still able to buy or sell cryptocurrency on the platform but may run into trouble when attempting to withdraw or send to others.
The issue was first disclosed in a tweet by Eduardo Gomez — Head of Support at Purse, a cryptocurrency gateway for eCommerce:
Venezuelan users reporting that Coinbase is showing this message when attempting to withdraw or send crypto. Please note that the users are not trying to buy or sell, but to transfer their coins. @CoinbaseSupport pic.twitter.com/nqKuS3tydw
— Eduardo⚡Gómez (@Codiox) August 2, 2018
Seemingly unaware of the problem or its cause, Coinbase CEO Brian Armstrong responded with pleasantry, stating his team will look into the matter:
Strange, taking a look and sent to the team, thx for surfacing
— Brian Armstrong (@brian_armstrong) August 3, 2018
With no official explanation from Coinbase, Twitter users wasted no time weighing in on possible reasons for the issue.
To @SoakerPatoshi, Coinbase had little or no say in barring Venezuelan users — the San Francisco-based exchange being forced to comply with the US government’s hard-line stance against the Venezuelan government.
Jill Carson, a cryptocurrency influencer, and advisor suggest this conclusion goes too far — pointing out that only about 60 Venezuelan nationals are prohibited from transacting with US citizens. Instead, Carson surmised the Venezuela government’s controversial, oil-backed ‘Petro’ cryptocurrency is the culprit.
US citizens and entities only cannot engage with certain sanctioned individuals in Venezuela (about 60 or so are on the list, mostly government officials)
— Jill Carlson (@_jillruth) August 3, 2018
The Petro, a crypto-asset whereby each token represents a barrel of the nation’s substantial oil reserves, has attracted widespread disdain from US Congress — who frame the digital asset as a thinly-veiled attempt to circumvent their government’s targeted sanctions against Venezuela. In a letter to US Treasury Secretary Steven Mnuchin, Senators Robert Menendez and Marco Rubio stated:
As such, we are concerned that a cryptocurrency could provide Maduro a mechanism by which to make payments to foreign lenders and bondholders in the United States, actions that would clearly thwart the intent of U.S.-imposed sanctions.
By disabling the transfer of cryptocurrencies — and their possible conversion to Petro tokens — Coinbase would indeed be complying with the Trump administration’s 2018 executive order, which explicitly forbids the purchase of Venezuelan state assets.
An explanation by Armstrong may address some of the questions about the cause of the issue, but the Petro will likely remain in the line of fire until full functionality resumes for Venezuelan Coinbase users.
Cover Photo by Public_Domain_Photography on Pixabay
Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.