Paxful, Citing Regulations and Its Own 'Risk Tolerance,' Exits Venezuela's P2P Bitcoin Market

Paxful is pulling out of Venezuela's peer-to-peer bitcoin scene.

"Increasingly strict" regulations hampered the P2P bitcoin exchange's ability to "Provide services to Venezuelans," according to a video tweeted by Paxful Monday.

A company spokeswoman confirmed the exit with CoinDesk.

"Concerns regarding the regulatory landscape around Venezuela and Paxful's own risk tolerance" prompted the exit, she said.

The departure will deprive Venezuela's underground crypto scene of its second-largest P2P outlet.

Venezuela's crypto traders heavily favor P2P crypto exchanges like Paxful and market leader LocalBitcoins over government-approved alternatives.

It also denies Paxful an emerging market it courted for years as the future of bitcoin adoption.

Venezuela's rampant inflation, unbanked population and high mobile phone usage have long appealed to company CEO Ray Youssef.

Those attractions weren't enough to overcome the myriad difficulties of operating in an economy as sanctioned and scrutinized as Venezuela's.

In addition to Venezuela's internal cryptocurrency regulator SUNACRIP, the country's international exchanges also face potential troubles from financial sanctions levied by the U.S.Paxful blamed U.S. sanctions when it shut off trades involving the Bank of Venezuela in June.It was not immediately clear whether the regulatory uncertainty cited by Paxful was internal or external, perhaps due to U.S. sanctions.