Crypto Neobank Wallbit leaves Venezuela due to sanctions

Wallbit, a neobank that supports crypto, has announced that it will stop offering services to users in Venezuela. This decision was made after Wallbit’s banking partner in the United States (US) called on the neobank to do so.

Close account of Venezuelan users

Wallbit has stated that the economic sanctions currently in place in Venezuela are the direct cause of this decision. However, the company will continue to serve Venezuelans who are outside the country.

Wallbit, a crypto-backed neobank that previously announced it would open bank accounts for US users, has now announced it will stop serving users living in Venezuela. A neobank, in turn, is an internet-only bank, without traditional branch networks.

On February 24, the company released a press release stating that its banking partner had requested the closure of all accounts of Venezuelan users residing in Venezuela. Users were asked to withdraw their funds as soon as possible. It is noteworthy that Wallbit has not given an exact date on which the accounts would be terminated.

The company has clarified that Venezuelan users who live outside the country can still use its services, but they will need to contact customer service in this case. This could affect Venezuelan freelancers who used the platform to receive their income abroad and convert it into crypto.

US sanctions against Venezuela

Wallbit further clarified that the reason for this abrupt decision is directly related to the sanctions that the US government is currently enforcing against some Venezuelan nationals and state-owned companies in the country. The company stated the following:

We would like to clarify that this account closure stems from the sanctions imposed by the US government on Venezuela, so we have an obligation to disable new account creation and prohibit new deposits from already existing accounts that have been created by users living in Venezuela.

Not the first

Wallbit is certainly not the first financial platform to cut ties with users from Venezuela, although it may be made mandatory.

In June, for example, Uphold, a New York-based cryptocurrency exchange and investment platform, announced that it would also close the accounts of Venezuelan users due to the “increasing complexity of US sanctions compliance.”

Similarly, Paxful, a P2P cryptocurrency exchange, announced in 2020 that it would no longer offer its services in the country. At the time, the platform cited “concerns about the regulatory landscape surrounding Venezuela and Paxful’s own risk tolerance” as the main driver of this decision.

It is therefore expected that Wallbit will not be the last platform to cut ties with Venezuelan users, at least until the US sanctions are over.

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