Coinbase-Backed Exchange Dodges Venezuelan Government to Distribute Seized Funds

The corruption funds, totaling $18 million, are being given to more than 62,000 healthcare workers. The exchange is airdropping the funds through its Mexico City-based P2P exchange, where many Venezuelans already have accounts. The joint effort by the United States and AirTM was acknowledged by opposition leader Juan Guaido via Twitter:

1/ An absolutely incredible story out of Venezuela today. @theairtm, a @Coinbase funded digital currency exchange, has been elected to redistribute $18M in US government seized corruption funds of the Maduro government back to 62,000 healthcare workers in Venezuela.

— Matt Ahlborg [UsefulTulips.org] (@MattAhlborg) August 21, 2020

Blocked but not Stopped

The Venezuelan government, having discovered the efforts, blocked access to the site within the country. However, within the day, AirTM had already provided video instructions on how to bypass the blockade:

🛑 Bloqueado @theAirtm en #internetVE #20Ago:@Airtm es una plataforma financiera que permite en hacer transacciones y operaciones entre monedas con otros usuarios.

Es implementado mediante #bloqueoDNS en operadoras como #CANTV, #Movistar, #digitel, #supercable. pic.twitter.com/G9uSDfKdmK

— VE sin Filtro (@vesinfiltro) August 20, 2020

The Maduro government has long been pro-cryptocurrency, even issuing its own oil-backed digital Petro. The redistribution program of corruption funds has been met with stiff opposition from government officials.

‘Bitcoinization’ of a Nation

Venezuela has had the highest inflation rate in the world for some time, and little is changing in the country. However, in the chaos, the easy accessibility of digital currencies like Bitcoin has helped to tip the scales in favor of the Venezuelan citizens. Bitcoin has become something of a ubiquitous payment tool for the impoverished nation, leading to what some call ‘Bitcoinization.’ The term expresses what happens when Bitcoin becomes the standard business currency throughout a nation. Other digital currencies have also moved into the region, as the Bolivar has left a fiscal vacuum. BeInCrypto reported early in 2020 that DASH could likely boast more than one million users by the end of the year.

Inflation Driving the Bus

The driving factor in pushing users into cryptocurrencies in Venezuela has been massive inflation. Due in large part to Maduro’s money printing efforts, the nation has seen as high as 53 million percent inflation. As the U.S. government continues pushing funds into the economy, many have posited that the dollar could respond in a similar way. If so, the process of Bitcoinization may get a boost in the U.S. and beyond.