Following Court Order, Banco Estado Welcomes Back Cryptocurrency Firm

The only public bank in Chile accepts the court's decision; two other major banks will appeal.

Banco del Estado de Chile (Banco Estado), the only public bank in Chile, has re-opened the account of a cryptocurrency business. In doing so, it becomes the first bank to comply with an order from the country’s anti-monopoly court.

Background

At the beginning of April, Chilean cryptocurrency businesses were dealt a damning blow as the last bank that was still servicing their accounts decided to stop. Specifically, Banco Estado shut down the accounts of three local cryptocurrency exchanges – Buda, Orionx, and CryptoMKT. This followed similar decisions by Itau Corpbanca and Scotiabank Chile.

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Buda CEO Guillermo Torrealba said at the time: “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.”

The three exchanges then took to the courts, filing a complaint against ten banks. The Tribunal de Defensa de la Libre Competencia (the court for the defence of free competition) subsequently ordered Banco Estado, Scotiabank and Itau Corpbanca to re-open the accounts.

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According to local news source La Tercera, Scotiabank and Itaú will be appealing the decision of the TDLC, but Banco Estado has re-authorised the account of CryptoMKT. Banco Estado is the official bank of the Chilean government and the biggest mortgage lender and issuer of debit cards in the country.

Martín Jofré, founding partner of CryptoMKT, said that his customers received 99.8 percent of their money when the company’s account had been closed so that they will have to start from scratch.

However, he expects business to be even better now. “It can produce a phenomenon like Uber: the massive use of Uber occurred when taxis blocked the Alameda. That’s when everyone started talking about the application,” he said.

The account of Buda is expected to reopen this week.

In a strange contrast, South America’s first blockchain summit was held in Santiago on the 8th of May, where speeches were delivered by managing executives from a number of major Chilean financial institutions.

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