Uphold finally closes operations in Venezuela, users unexpected reactions

Uphold, a cryptocurrency exchange based in New York has announced the closure of its operations in the Venezuelan market. The company, which has previously had issues with users in the country—shutting down accounts and requiring KYC controls that some users deemed excessive—claims that the decision to leave Venezuela is due to the “complexity of complying with US sanctions.”

• Uphold, a cryptocurrency exchange and stock trading platform based in New York, has announced that it will no longer serve Venezuelan customers.
• The company has instructed Venezuelan users to withdraw their funds before July 31 via bank accounts linked to their Uphold accounts or via cryptocurrency transactions
• Uphold announced that it would go back to Venezuela “as soon as changes in U.S. policy permit.

According to its own data, the company serves more than 184 countries and claims that the current situation between Venezuela and the United States is the reason for this decision.

Uphold stated in an email to the exchange’s Venezuelan customers:

We’re very sorry to tell you that Uphold has decided to withdraw from Venezuela owing to the increasing complexity of complying with U.S. sanctions. Venezuela was one of the first countries to embrace Uphold, and we love serving our customers there. We are taking this step very reluctantly.

The company did add, however, that it intends to return to the Venezuelan markets as soon as the circumstances permit. The company has instructed Venezuelan users to withdraw their funds before July 31 via bank accounts linked to their Uphold accounts or via cryptocurrency transactions, as the company is not allowing new users from Venezuela to open accounts. Additionally, the exchange will automatically close any accounts that have no balance.

The exchange has reportedly experienced difficulties and operational issues while operating in Venezuela before. According to an Instagram user group, some Venezuelan users have previously reported losing access to their accounts and dealing with irrational requests for information regarding their platform transactions. Additionally, a few users claimed that their accounts had been terminated mysteriously.

Some users who followed Uphold’s advice and attempted to withdraw their money are now griping on social media sites that their accounts are in a “routine revision” state. Due to unannounced details, it is unclear if this is a measure applied to all Venezuelans on the platform or just to some.

Due to sanctions, other services and wallets have also targeted Venezuelans. Due to a misconfiguration brought on by U.S. sanction directives in March, Infura, one of the companies offering endpoint connections for Metamask, a well-known Web3 wallet, denied access to Venezuelan users.

Venezuelan Users React to News of Uphold Suspension of Activities 

Uphold, a cryptocurrency exchange, was forced by American sanctions to officially disconnect from Venezuela.

The U.K.-based exchange announced in a change to its website’s help center that it was ending its assistance to Venezuela due to the “increasing complexity of complying with U.S. sanctions.”

According to a company statement, “We are taking this step very reluctantly,” and Venezuelan users must withdraw their funds as soon as possible. Users have until July 31 to remove Bitcoin and other cryptocurrency assets from their account wallets, after which their accounts will be completely restricted as of September 30.

In an email to users, Uphold announced that it would go back to Venezuela “as soon as changes in U.S. policy permit.”

Despite having one of the highest rates of cryptocurrency adoption in the world, U.S. sanctions against Venezuela have been a significant obstacle to the growth of cryptocurrency businesses there. Paxful, a peer-to-peer cryptocurrency exchange, decided to leave the nation in 2020.

In a statement provided at the time, the platform stated, “We regret to inform that Paxful will cease operations in Venezuela due to concerns about the regulatory landscape around Venezuela and Paxful’s own risk tolerance.”

The decision has already prompted responses from Venezuelans, as was to be expected. It is regrettable that Uphold was compelled to leave Venezuela for political reasons, according to Anibal Garrido, a Venezuelan cryptocurrency asset advisor who has experience using Uphold as a “fast, secure, and comfortable” exchange.

According to reports, the Venezuelan user declared that the unfortunate action “highlights that reliance on centralized systems has its consequences.” I urge users to consider the value of maintaining their own custody of cryptocurrency assets.

This choice ends the uncertainties that the company’s numerous waves of unexpected account closures for Venezuelan users have caused. Several Venezuelan users’ accounts were blocked in 2019, according to reports, even after they complied with the company’s extraordinary requests for more KYC (know-your-customer) information. Venezuelans believed that the recent US sanctions on additional sanctions were the cause of the account closures.

When asked at the time if U.S. sanctions were affecting the company’s ability to conduct business in Venezuela, Uphold CEO Juan Pablo Thieriot responded, “Uphold is fully committed to complying with the laws that apply in each of the jurisdictions in which it operates.”

Uphold’s departure leaves Venezuelans with fewer options for exchanging cryptocurrencies and receiving remittances, but there are still other, equally safe, options available.

The peer-to-peer exchange platform LocalBitcoins, Binance’s peer-to-peer market, decentralized exchanges like Uniswap, the state-owned platforms Patria and PetroApp, as well as cryptocurrency exchanges that are permitted by the government to conduct business in the nation, are among the most well-known.

According to Useful Tulips, Venezuela continues to lead Latin America in peer-to-peer Bitcoin trading, having exchanged more than $4.7 million this week alone.