Various countries continue to oppose cryptocurrencies. Venezuela has become a notorious example in that regard. In a recent turn of events, the government is now targeting companies who pay employees in Bitcoin. One company has been officially sanctioned for doing so. Things got so bad that numerous employees were laid off in the process.
Venezuela has Many Problems
Most people are aware of how Venezuela is struggling financially. The country has gone through recession and hyperinflation in recent years. It seems things are not improving either, as the situation only grows direr. Government officials are now officially investigating companies paying their employees in Bitcoin. Escaping the negative cycle of financial woes in Venezuela is not allowed.
A recent Reddit post shows how dire things have gotten in recent months. One company began paying its employees in Bitcoin. On the surface, there is nothing wrong with doing so. After all, private companies in the country can still make their own decisions, although Hugo Chavez would like to claim otherwise. While no people were fired, the company was turned into a “closed doors” venture, yet little changes for the employees themselves.
Eventually, Hugo Chavez passed away and President Maduro took over the reins in Venezuela. Unfortunately, things have not improved for this company and its employees ever since. A part of the company was sold several years ago and numerous employees were let go or left on their own accord. The hyperinflation plaguing the country is still a problem today, which eventually forced the company to pay employees in something other than the Venezuelan Bolivar.
Compared to fiat currency in Venezuela, Bitcoin is a stable form of payment. Even though the world’s leading cryptocurrency is volatile, the Bolivar can only lose value every moment. Bitcoin, on the other hand, can swing both ways in most cases. It would make sense for domestic companies to pay employees in Bitcoin, assuming everyone agrees upon this idea. For the company in this story, it made a lot of sense. Some employees still preferred fiat payments, but that would not cause any real problems whatsoever.
Things eventually took a turn for the worse when a new seamstress was hired to work for this company. She is a clear Maduro supporter and seemingly did not take kindly to the concept of accepting cryptocurrency payments. As such, she claimed the company should embrace the “petro”, a cryptocurrency which seemingly isn’t gaining any traction in Venezuela. She was also quick to leave the company after getting her first paycheck, which is when things eventually got very dire.
It turns out the seamstress sued the company through the superintendence institution focused on cryptocurrency in Venezuela. The company was not registered with these authorities, yet paid employees using in Bitcoin. This was not allowed, nor legal. In the end, the company was forced to pay a sum to the agency and a sanction was handed down. With insufficient funds to pay the agency, the company was eventually closed down and padlocked. All employees are now out of a job.
To make matters worse, the company CEO was forced to “voluntarily” sign over the company to the state. This was done to ensure he would not face jail time for paying employees in Bitcoin, which is not an official cryptocurrency in Venezuela. It is evident that incidents like these highlight the dire nature of cryptocurrency in Venezuela. Anyone trying to bend the law in their favor – even if they aren’t doing anything illegal on paper – will be subjected to governmental scrutiny sooner or later.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.
Image(s): Shutterstock.com
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