News

Chilean Crypto Exchanges Win Case Challenging Closure of Bank Accounts

0 Comments

Chile’s cryptocurrency exchanges have been granted victory in their case against banks. The Chilean anti-monopoly court has ordered two banks to reopen accounts belonging to Buda, just about a week after they were shuttered.

All the country’s banks stopped offering banking services to cryptocurrency exchanges over unclear reasons. The last one to deny its services was state owned Banco Estado. Corpbanca and Bank of Nova Scoti had also closed accounts belonging to cryptocurrency exchanges.Banco Estado

The action by the banks appeared coordinated coming days within each other and shortly after a warning from the Financial Stability Council against cryptocurrencies. The body includes representatives from the ministry of finance, pensions regulator among other government agencies.

The ban had threatened to kill the nascent cryptocurrency industry in Chile. Left with no banking services, exchanges like Buda have been considering their exit. Buda had a 24-hour volume of $1 million when its bank account was shut.

Buda CEO Guillermo Torrealba lamented the move to shut bank accounts as killing the entire industry.

Killing Entire Industry

“They’re killing an entire industry. It won’t be possible to buy and sell crypto in a safe business in Chile. We’ll have to go back five years and trade in person. It seems very arbitrary.”

Torrealba had also complained the exchanges were being unfairly targeted despite abiding by all regulations governing financial institutions.

An association of banks called ABIF refused to intervene saying it was a matter of bank-client relationship.

Others like CryptoMKT had adopted a defiant stance saying they will find their own mechanism to make cryptocurrency transactions possible outside the banking system. It did not, however, go into details as to how this would be possible.

Cryptocurrency regulation

The small cryptocurrency community in the country had taken to social media to express their frustration over the move.

Under #ChileQuiereCryptos or Chile Wants Crypto, they termed the move retrogressive.

A similar scenario is also unfolding in India where banks have been asked to stop dealing with cryptocurrency businesses. The Reserve Bank of India has given regulated institutions less than three months to wind down such relationships.

A case challenging the move is in court. The RBI among other government entities have been directed to file a response.

Leave a Reply

avatar
  Subscribe  
Notify of
close-link

Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks.

CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk.

When trading in stocks your capital is at risk.

Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Some links are affiliate links. For more information please read our full risk warning and disclaimer.