BITCOIN

Bitcoin exchange temporarily shuts down amid Venezuela crackdown

TAGs: Bitcoin, IMF, venezuela

Venezuela-based bitcoin exchange SurBitcoin has been forced to shutter its operations—albeit temporarily—as the government continues its crackdown on bitcoin mining businesses.

Last week, the bitcoin exchange told its clients to withdraw their cash and cryptocurrency balances after the company’s bank account at Banesco, Venezuela’s largest financial institution, was suddenly shut down.

Bitcoin exchange temporarily shuts down amid Venezuela crackdownIn its announcement, SurBitcoin explained that its services will be down for several weeks while its executives forge new financial partnerships.

“We expect to resume operations in approximately two weeks,” the bitcoin exchange said.

SurBitcoin did not detail why Banesco decided to stop providing banking services to the exchange. However, the shutdown came in the heels of Venezuelan police busting a bitcoin mining farm in the state of Carabobo.

According to the Organized Crime Bureau of the Bolivarian National Police, authorities discovered about 11,000 “bitcoin mining devices” in a warehouse overseen by two Venezuelans who they claimed were part of an international crime organization in Poland involved in “money laundering, computer crime, financing terrorism, electronic theft and exchange fraud, through the production of such a virtual device in various parts of the country.”

Several weeks ago, federal police also arrested four bitcoin miners in the city of Charallave on charges of cyber fraud and electricity theft. Investigators said the four were operating more than 300 Antminer units and selling the bitcoins “on a commercial website,” and that their mining operation is negatively affecting “the consumption and the stability” of the Charallave’s electricity services.

Venezuela is currently wading through the worst inflation period in its history, with consumer price inflation hitting 480 percent in 2016—which is nothing, according to analysts at the International Monetary Fund (IMF), who predicted that the country’s inflation rate will soar to 1,640 percent in 2017.

The situation is already affecting all aspects of daily living in the country, and the reports of food and medical supplies shortages, weak oil prices and rampant theft has forced the government to declare a state of economic emergency. In December, Venezuelan President Nicolas Maduro decommissioned the 100-bolivar bill in an attempt to “keep beating the mafias” that have been smuggling the bills on the border with Colombia.

Current bitcoin price

Bitcoin, meanwhile, continues its steady rise in the market, trading at $1,047.35 early Tuesday morning.

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