SurBitcoin, the largest Bitcoin exchange in Venezuela, will officially resume fiat-to-Bitcoin trading by next week after solving its disputes with a major Venezuelan bank, Banesco.
On Feb. 3, for the first time since its launch in August 2014, SurBitcoin suspended trading for all of its users as Banesco, Venezuela’s largest bank with a market share of 14.2% percent, abruptly shut down the bank account of SurBitcoin. The bank told operators of SurBitcoin that Venezuelans aren’t allowed to utilize the national currency, the Bolivar, to trade Bitcoin.
For over three weeks, SurBitcoin was forced to suspend its operations and temporarily put an end to fiat-to-Bitcoin trading whilst attempting to come to a resolution with Banesco. The temporary suspension of SurBitcoin coincided with the local government’s crackdown on Venezuelan Bitcoin miners, who were arrested for utilizing the country’s resources, such as electricity, for mining Bitcoin.
A few mining centers, including a major establishment in Valencia, were shut down and dismantled by local authorities and tension arose between Bitcoin companies, users, miners and the local government.
At the time, in a letter to its users, SurBitcoin reassured traders on the platform that the exchange will be able to resume services within a few weeks, as soon as the exchange updates its infrastructure with new improvements and security measures in order to be compliant with local regulations on financial institutions and money transmitting companies.
Exactly 19 days since the announcement of the suspension, SurBitcoin announced that the exchange will be able to resume fiat-to-Bitcoin trading for all of its users by next week. SurBitcoin emphasized in an official statement on its social media account that the exchange received an approval from Venezuelan bank Banesco to operate within a week.
What this means for Venezuelan Bitcoin
While the suspension of SurBItcoin and resumption of its services have been treated like normal conflicts between a bank and Bitcoin company, the approval SurBitcoin was granted by Banesco carries larger value than many people would imagine.
Over the past few months, the Bitcoin industry and market of Venezuela were in fear of government crackdown. Local authorities, police and law enforcement agencies were recklessly and ruthlessly locking Bitcoin miners and business operators in jail without offering a reason behind their actions.
Bitcoin exchanges including SurBitcoin were also targeted by the local government as there exists no proper regulations, policies or framework established within the Venezuelan financial industry that can be applied to Bitcoin businesses. Thus, until today, the legality of Bitcoin exchanges and Bitcoin trading has been unclear.
The approval of SurBitcoin granted by Banesco can be understood as an approval of Bitcoin exchanges in general. Bitcoin exchanges like SurBitcoin will be able to operate within Venezuela if they coordinate and cooperate with local banks and financial institutions and implement industry-wide Know Your Customer and Anti-Money Laundering systems.