📢 The closure of El Dorado P2P in Venezuela and its impact on the crypto market

The Venezuelan crypto market is facing a critical moment following the announcement of the immediate cessation of operations of the El Dorado P2P platform, a fundamental reference for cryptocurrency transactions in the country.

Regulatory Context

Guillermo Goncalvez, co-founder of El Dorado P2P, expressed his regret over the closure and clarified that the platform never intended to promote speculation in the parallel currency market. This decision comes in an environment of intensified government control over the foreign exchange market, which has resulted in the detention of various actors linked to platforms that serve as a reference for the price of the dollar in the unofficial market.

Venezuela has maintained a strict currency control for years, where P2P platforms have become essential alternatives for the local population, allowing them to protect their assets against the persistent depreciation of the bolívar.

Impact on the cryptocurrency ecosystem

The closure of El Dorado P2P represents a significant blow to the trading of cryptoassets in Venezuela, especially for stablecoins like USDC and USDT. This platform was a crucial channel for:

• Buying and selling of stablecoins used as a refuge against inflation
• Access to foreign currencies in a foreign exchange control environment
• P2P operations with lower fees than other alternatives

Venezuelans who used this platform to protect their savings from inflation will have to look for alternatives, possibly on platforms with greater restrictions or higher costs.

⚠️ Could other platforms face similar restrictions?

The situation raises concerns about the future of other exchange platforms in the country. Although the major centralized platforms have greater international backing and regulatory compliance capacity, they are not exempt from facing similar challenges in jurisdictions with strict controls.

In fact, various major exchange platforms have implemented stricter measures in their P2P services for Venezuela, including:

• Enhanced identity verification for Venezuelan users
• Limitations on transaction volumes
• Greater restrictions to prevent price manipulation in P2P markets
• Enhanced monitoring of transactions with stablecoins

These regulatory changes could signal a trend towards greater government oversight of the channels that facilitate access to foreign currencies, regardless of whether they operate with cryptocurrencies or traditional currencies.

The situation illustrates the specific challenges faced by crypto markets in economies with strict currency controls, where P2P platforms have become essential tools for the local population, beyond the speculation or investment that characterizes their use in other markets.