Crypto exchange Kontigo has frozen US-bank services for its Venezuelan users, cutting off thousands of people who depend on the platform to store and move US dollars in an economy hit by hyperinflation.

The San Francisco-based company, which describes itself as “a USDC ($1.00) Smart Neobank for Latinos in the U.S. and Latin America”, said on X on November 21 that its United States-based bank account provider has “ordered a temporary suspension of services.”

“We are working on finding a solution for you,” Kontigo wrote to its Venezuelan customers. “Our commitment remains intact, both to you and to [Venezuela].”

The development comes as the US ramps up political and military pressure on Venezuela.

On Monday, the US State Department designated Venezuelan President Nicolás Maduro and some of his key allies as “members of a foreign terrorist organization.”

The fintech provider gave no further details about the reasons for the suspension. Nor did it say when it expects services to resume.

DL News has contacted Kontigo for comment, but the company has yet to respond.

Tensions rising

Retailers have claimed that they are rushing to introduce solutions that will let customers pay in crypto at the till as citizens turn to crypto as an alternative to the fiat bolivar.

In November, the International Monetary Fund estimated that inflation in Venezuela would hit the 270% mark by the end of 2025.

US-Venezuela remittances are a major source of income for the Latin American country, to the point that the Venezuelan government launched the Patria platform in 2017, adding crypto remittance functionality shortly after.

However, the platform suffered a major setback when the government agency that spearheaded it was shuttered as part of a major corruption crackdown in 2023.

Gaining prominence

Kontigo is one of only two crypto exchange platforms currently authorised to operate in Venezuela, the Spanish-language media outlet Criptonoticias explained, adding that the company has “gained prominence in the country in recent months.”

The same media outlet noted that US accounts-related services are one of Kontigo’s “most used services among Venezuelan customers.”

Venezuelans reportedly use Kontigo to safeguard their US dollar holdings and make international payments using crypto.

The firm has a deal with the Venezuelan commercial bank Banco Nacional de Crédito that allows customers to convert US dollars into Circle’s USD Coin.

Kontigo operates services throughout Latin America, and claims that over 300,000 people have downloaded its app. However, the platform does not make its transaction volume data public.

Its financial backers include crypto-keen investment firms like Coinbase Ventures, Soma Capital, and Y Combinator.

Tim Alper is a news correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.