An ongoing standoff between banks and digital currency companies in Chile has taken another turn as the Court of Appeals of Santiago has ruled against a state-owned bank Banco Estado. The ruling states that the bank must now re-open the account of Orionx exchange, which was terminated earlier this year.
Back in April, commercial banks Itau Corpbanca and Bank of Nova Scotia, alongside the state-owned Banco Estado have severely hindered the operations of Chile’s largest virtual currency exchanges Orionx, Crypto MKT and Buda by refusing them banking services and shutting their accounts.
At the time, banks claimed they received instructions to “not open an account for anyone that has relation to cryptocurrencies.” In response, exchanges presented their case to the Chilean appeals court, which decided to hear them out while their accounts remained dormant.
Luckily for Chilean crypto aficionados, the appeal court ruling was favourable as it claimed that the account closure was, “an arbitrary and illegal action, which constitutes a deprivation of the right protected by Article 19 No. 2 of the Political Constitution of the Republic, that is, the right to equality before the law.”
The conflict between banking institutions and the crypto sphere has been growing for quite a while in Chile. The Buda exchange has filed lawsuits against a total of 10 different banks in the country, while Orionx similarly sued 6 major banks just last month, citing unfair abuse of their power and a monopolistic stance towards crypto businesses.
Notably, the Orionx victory is not the first one, as the anti-monopoly court of Chile has ordered Banco Estado and Itau Corpbanca to resume banking services to Buda back in April of this year. The exchange was the local industry leader at the time, with 24-hour trading volumes hovering around the $1 million mark before the banks’ decision completely decimated their business.
Guillermo Torrealba, Buda CEO at the time stated that „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.“
Chilean central bank is reportedly developing a regulatory framework so that the authorities could monitor risks, associated with cryptocurrencies. According to Mario Marcel, the president of the country‘s central bank, virtual currencies are not considered money, currency, or securities in Chile. Hopefully, the new framework will help to firmly confirm their status and build a legal base to support their development, as such drastic measures as the banking blockade are clearly too harsh for the budding industry.
Image Source: “Flickr”
I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.