Venezuelan economy has been struggling to break free from the clutches of social and economic crisis for quite some time now. International Monetary Fund (IMF) estimated that the economy contracted 10 percent last year, and it is projected to shrink at least 8 percent this year.

Earlier this year, it was reported that in times of such economic mayhem, the bitcoin community of the country was thriving.

Bitcoin Magazine reported that while the Venezuelan government has never clarified its stance on bitcoin, the law is very clear on its definition of money, and bitcoin does not fit that definition. Under Venezuelan law, Bitcoin is considered property rather than money.

However, a latest report from Corporación Venezolana de Televisión or VTV, a public network and state-owned broadcaster under the administration of the Ministry of Popular Power for Communication and Information, has taken an anti-bitcoin stance, naming the bitcoin network as “The cybercriminal system”, CryptoCoinsNews reported.

“Is it coincidence that the criminal and terrorist groups in the world, are the main activists and advocates bitcoin? This virtual currency is not backed by any institution or country and is used to pay illegal transactions”, according to Google-translated version of the report.

It goes on to say that the digital currency is used to make purchases or hire illegal services from the dark side of the internet. With particular reference to Venezuela, the report says that bitcoin is “a tool for tax evasion, money laundering and cause damage to the country's economy”.

It further noted that many people have starting using Bitcoin, “as an alternative to evade policies that the Bolivarian Government is pushing to ensure the correct development of the economy in exchange rate matters.”

It concludes saying that while it is not known as to how the fluctuation in this digital currency is regulated, it is clear that its use has a negative effect on the national currency, the use of legal currency and productive-economic growth.