Chilean court orders reopening of banking accounts held by crypto exchanges

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Chilean court ruled the reopening of crypto exchanges bank accounts

The Tribunal de Defensa de la Libre Competencia (TDLC) ruled the reopening of the currently closed accounts of Chilean cryptocurrency exchanges

According to Diário Financeiro, the decision took place as a resolution after banks Itaú and Banco Estado requested the court to re-examine the case and render ineffective the previous decision. The goal was to keep the banking accounts open so that the crypto exchanges could carry out their business as usual.

In December, the Supreme Court understood that the closing of current accounts was something valid and necessary. Since the cryptocurrency market is not regulated by Chilean law, there was a risk of these companies being associated with money laundering.

The Chilean court, however, made it clear that the Supreme Court’s decision in favor of the banks cannot be interpreted as a new precedent.

The decision of the TDLC was not unanimous. Minister María de La Luz Domper was about to suspend the injunction that gave the exchanges the right to keep their accounts open.

Crypto Exchanges fight for existence in Chile

Despite this positive result for the cryptocurrency exchanges, this is just one more chapter in a series of events in the South American country. Next month, the court will hold hearings for the witnesses of the case.

Among them are the top executives of the president of the Association of Banks, high-ranking people in the Chilean government such as Finance Ministers Felipe Larraín, Economy Minister José Ramón Valent and the president of the Financial Market Commission, Joaquín Cortez.

Banks vs. Exchanges

The case involving exchange buda.com got wide attention. The exchange had its accounts closed by financial institutions Banco Estado, Itaú, Santander, BCI (Banco de Crédito e ‘Inversiones’), Banco de Chile, Banco Bice, Scotiabank, Banco Security, Banco Internacional and Bilbao Vizcaya (BBVA). Buda.com filed a lawsuit, accusing these banks of engaging in “anti-competitive conduct”.

The exchange claimed that the banks took advantage of their position of collective dominance to “restrict and prevent competition in the markets affected” by them. Such a practice would be in disagreement with Chile’s Decree Law No. 211.

On April 25, 2018, the TDLC granted a precautionary measure obliging Itaú and Banco Estado to reopen their current accounts. The decision also applied to Scotiabank. In May, TDLC rejected the banks’ appeals and ordered the three banks to reopen the accounts of Buda.com and Cryptomkt.

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