Crypto exchange Valr has announced it has closed its crypto arbitrage service to new customers in order to comply with the requirements of its banking partner. This announcement makes Valr the latest South African crypto exchange platform to close its arbitrage business. Ovex was one of the first exchanges to announce its exit from the market.
Banking Partner Requirements Push Exchange out of Arbitrage Market
The South African cryptocurrency exchange, Valr, will be exiting the crypto arbitrage market on February 28 in order to comply with its banking partner’s requirements, a report has said. The exchange also revealed it stopped offering crypto arbitrage to new customers on January 31.
With this announcement, Valr becomes the latest South African cryptocurrency exchange to exit the crypto arbitrage market in 2022. Ovex became one of the first exchanges to state it would be exiting the crypto arbitrage business after it issued a statement informing its clients of the decommissioning on January 31.
While Ovex did not share its reasons for exiting, Valr is quoted in a Moneyweb report suggesting that partner requirements forced the exchange to make the decision. Valr, however, insists its exit from the arbitrage market will not affect other services. The company said:
The decision to discontinue our arbitrage service has been taken to comply with some of our banking partner requirements. No other Valr services are affected and your funds remain secure. You will continue to have access to Africa’s largest marketplace for crypto assets with the ability to buy, sell and store over 60 cryptos on Valr.
Banks Hostile to Crypto Arbitrage Traders
This message was reiterated by the exchange’s COO Gianluca Sacco, who suggested that Valr will now focus on its core business.
Meanwhile, Asif Aziz, the chief technology officer of Libex — another crypto exchange that claims to have been pressured to end its arbitrage service — said banks’ hostility towards crypto arbitrage could be one of the reasons why exchanges are abandoning the business.
“Banks have reportedly been hostile to crypto arbitrage for some time, evidently seeing customers purchase large amounts of forex for export, without paying much heed to the return flow as these crypto trades were closed out and profits recycled back to SA,” Aziz is quoted saying.
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Terence Zimwara
Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.
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