Venezuela Sues US Website Owners For 'Racketeering' And 'Cyberterrorism' To Try To Shut Them Up About Exchange Rates

Cyrus Farivar is reporting that the government of Venezuela has decided the best way to keep its citizens from learning more about its collapsing economy is to sue the US-based operators of a currency exchange information website… in a US federal court.

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 (CBV) in federal court in Delaware, where the site is based. 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."

When corrupt and censorious governments engage in litigation, "bizarre" and "bombastic" are a given. It isn't exactly deposed Panamanian dictator Manuel Noriega suing Activision from his jail cell, but it's close. The opening paragraph of the complaint takes a purple swing for the prose fences.

How far will some go to enrich themselves (and their friends) and to regain the political power they crave to enrich themselves further? Would they go so far as to hurt their own countrymen by making their already challenging lives even harder? Defendants would. And they have.

What follows is revisionist history, a rose-tinted view of Venezuela's future prospects as a viable nation state and lots of accusations with little evidence to back them up. The Venezuelan government claims the real reason the website publishes exchange rates (that the government itself won't allow anyone to publish) is not to inform Venezuelan citizens of the decreasing worth of their cash, but to overthrow the government. Or get rich trying.

Defendants are Venezuelan exiles living in the United States who virulently oppose the Republic’s elected leaders, but not out of concern for their countrymen. To the contrary, Defendants seek only to grab riches and power for themselves and their friends, willingly increasing the hardships of ordinary Venezuelans in the process. And in a ruthless exercise of realpolitik, Defendants seek to trick the Venezuelan populace that elected the Republic’s current government, hoping that voters will turn on their leaders, and blame them for the harm caused by Defendants.

Like many baseless lawsuits filed by censorious entities, the filing claims there's a RICO violation in play here. Oh, and Lanham Act violations. Also: cyber-terrorism.

In taking these steps, Defendants conspired to use a form of cyber-terrorism to wreak, and in fact they have wreaked, economic and reputational harm on the Central Bank by impeding its ability to manage the Republic’s economy and foreign exchange system. Among other things, Defendants’ actions are:

• Exacerbating inflationary pressures that diminish the purchasing power of the Venezuelan people and the Central Bank;
• Diminishing the value of the Central Bank’s seigniorage for the new currency it prints (or the coins it mints) or that it newly puts into circulation;
• Depriving the Central Bank of the higher real returns that it would otherwise receive on monies it lends to other financial institutions and entities;
• Causing trade to be withheld from the Central Bank, as capital that it would otherwise retain or attract instead leaves, with investors seeking returns from other world economies; and
• Creating the false impression that the Central Bank and the Republic are incapable of managing Venezuela’s economy.

The operation of DolarToday is rather simple, at least in terms of establishing an exchange rate. (The constant creation of mirror sites to circumvent government censorship is a bit more complex.)