World Economy

Venezuela Sues Website for ‘Cyber-Terrorism’

Venezuela Sues Website for ‘Cyber-Terrorism’Venezuela Sues Website for ‘Cyber-Terrorism’

The US-based website that publishes a daily unofficial exchange rate between American dollars and Venezuelan bolivares has recently filed a vigorous defense in a strange international lawsuit.

The site, DolarToday, was sued in October 2015 by the Central Bank of Venezuela in federal court in Delaware, where the site is based, Venezuela’s New York-based Ars Technica reported.

In its bizarre and bombastic civil complaint, the US-based lawyer for the CBV argued that the three Venezuelan-American men who run the site are engaged in “cyber-terrorism” designed to create “the false impression that the central bank and the republic are incapable of managing Venezuela’s economy.”

The CBV formally accuses DT of violating a major anti-racketeering and criminal conspiracy statute (RICO Act), false advertising, unjust enrichment, and strangely, breaching a Venezuelan civil statute that refers to “causing harm.” (Obviously, an American federal court is unlikely to adjudicate claims made under Venezuelan law.)

To put it mildly, the Venezuelan economy has been in something of a tailspin in recent years. President Nicolas Maduro, the successor of strongman Hugo Chavez, has been unable to rein in skyrocketing inflation (now near 100%) and a massively depressed economy. Recent press reports have detailed that many people are unable to buy basic goods like diapers and cooking oil. This week, the Financial Times described the country as being on the “edge of a political crisis.”

Venezuela has maintained currency controls since 2003 and its currency cannot—at least officially—be traded on the open market. The government maintains multiple “official” exchange rates, which differ depending on what purpose the foreign currency is needed for. The black market exchange rate, at least according to DolarToday, is significantly higher: $1 buys about 865 bolivares.

 Phone Home

DolarToday, as it explains in its filing, does nothing more than call currency traders on the Venezuelan-Colombian border to find out what the exchange rate is between bolivares and pesos. The site simply converts the pesos to dollars to find out the market rate between bolivares and dollars, and then publishes that figure.

This simple operation, as it turns out, infuriates the Venezuelan government.