Chilean Court Orders Banks to Operate Crypto Exchange Accounts

Chilean cryptocurrency exchanges have marked a massive victory as an anti-monopoly court in the country ordered the banks to keep the exchanges’ accounts open, as per a recent report by the Chilean news outlet Diario Financiero.

The anti-monopoly court known as the Tribunal de Defensa de la Libre Competencia (TDLC) has conducted a poll before passing its judgment in favor of the crypto exchanges, according to an official post by Buda.com, a Chilean crypto Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term. Though a majority of the judges favored the exchanges, the decision was not unanimous.

Chile vs. Cryptocurrency

The fight between the Chilean cryptocurrency exchanges and the country’s banks started last year as the banks providing services to the crypto businesses decided to cut their ties with all three exchanges - Buda, Orionx, and CryptoMKT. The last bank to blacklist the crypto exchanges was Banco Estado, which took the harsh decision in April.

Although the crypto industry in Chile is relatively small when compared to other countries in the world, it was a huge blow to all exchanges.

Days later, the three exchanges formed a consortium to appeal against the banks’ decision in an appeals court.

The recent decision by the TDLC was taken in response to the Chilean Supreme Court's verdict given in November 2018. The top court then favored the banks, saying that they have legal rights not to provide services to crypto exchanges, as the new sector is not regulated under the country’s laws and there is a risk of Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term.

The next hearing on the case is scheduled for February 2019 when the TDLC will hear the testimony of both parties. Chilean top officials, including the country’s Minister of Finance, Felipe Larrain, Minister of Economy, Jose Ramon Valente, and the president of the country's banks association, Segismundo Schulin-Zeuthen, will also attend the court’s hearing.

After the suspension of bank accounts last year, BUDA’s co-founder and CEO Guillermo Torrealba said: “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.”