Initially revealed on August 2, 2018, several Venezuelan Coinbaseusers abruptly lost the ability to withdraw or send cryptocurrency, prompting speculation that the exchange may have its hands tied by US-Venezuela sanctions. Purportedly, Venezuela-based Coinbase users are still able to buy or sell cryptocurrency on the platform but may run into trouble when attempting to withdraw or send to others. The issue was first disclosed in a tweet by Eduardo Gomez — Head of Support at Purse, a cryptocurrency gateway for eCommerce. Seemingly unaware of the problem or its cause, Coinbase CEO Brian Armstrong responded with pleasantry, stating his team will look into the matter. With no official explanation from Coinbase, Twitter users wasted no time weighing in on possible reasons for the issue.
To @SoakerPatoshi, Coinbase had little or no say in barring Venezuelan users — the San Francisco-based exchange being forced to comply with the US government’s hard-line stance against the Venezuelan government. Jill Carson, a cryptocurrency influencer, and advisor suggest this conclusion goes too far — pointing outthat only about 60 Venezuelan nationalsare prohibited from transacting with US citizens. Instead, Carson surmised the Venezuela government’s controversial, oil-backed ‘Petro’ cryptocurrency is the culprit. The Petro, a crypto-asset whereby each token represents a barrel of the nation’s substantial oil reserves, has attracted widespread disdain from US Congress — who frame the digital asset as a thinly-veiled attempt to circumvent their government’s targeted sanctions against Venezuela. In a letter to US Treasury Secretary Steven Mnuchin, Senators Robert Menendez and Marco Rubio stated:
As such, we are concerned that a cryptocurrency could provide Maduro a mechanism by which to make payments to foreign lenders and bondholders in the United States, actions that would clearly thwart the intent of U.S.-imposed sanctions.
By disabling the transfer of cryptocurrencies — and their possible conversion to Petro tokens — Coinbase would indeed be complying with the Trump administration’s 2018 executive order, which explicitly forbids the purchase of Venezuelan state assets. An explanation by Armstrong may address some of the questions about the cause of the issue, but the Petro will likely remain in the line of fire until full functionality resumes for Venezuelan Coinbase users.