Coinbase-Backed Exchange Dodges Venezuelan Government to Distribute Seized Funds

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In Brief
  • Coinbase-funded AirTM is dropping $18M to healthcare workers in Venezuela.

  • Cryptocurrency usage has spiked in the country, leading to calls of 'Bitcoinization.'

  • Maduro's regime has blocked access to the exchange, but methods to get around the block have already surfaced.

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The Trust Project is an international consortium of news organizations building standards of transparency.

AirTM, a digital currency exchange backed by Coinbase is distributing funds seized in connection to corruption from the Maduro administration in Venezuela.

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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.

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The joint effort by the United States and AirTM was acknowledged by opposition leader Juan Guaido via Twitter:

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:

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.

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With a background in science and writing, Jon's cryptophile days started in 2011 when he first heard about Bitcoin. Since then he's been learning, investing, and writing about cryptocurrencies and blockchain technology for some of the biggest publications and ICOs in the industry. After a brief stint in India, he and his family live in southern CA.

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