Chilean Court Orders Banks to Re-open Crytocurrency Exchange Accounts

Chilean Court Orders Banks to Re-open Crytocurrency Exchange Accounts

April 30, 2018 Off By Steven Anderson

The anti-monopoly court in Chile has reportedly ordered two of the country’s major banks, Itau Corpbanca and Bancoestado (Banco del Estado de Chile); to re-open one cryptocurrency exchange’s accounts after the trading platform filed a suit against ten banks for what it termed as anti-competitive behavior. The court further ordered that the two banks have to enter into newer contracts with the digital currency trading company under the same conditions and terms as before.

When the exchange, Buda, filed the lawsuit against the banks, local media outlets widely reported the story. The suit was filed earlier this month at the Chilean Court for the Defense of Free Competition, TDLC (Tribunal de Defensa de la Libre Competencia). The banks had shut down the crypto trading platforms’ accounts besides also closing those of other exchanges including Cryptomkt and Orionx. The ten banks sued by Buda, which formerly existed as Surbtc, include Itau, Santander, Bancoestado, Bci, Scotiabank, Bbva, and Banco de Chile.

A local news outlet, Diario Financiero, detailed on the TDLC’s Thursday ruling saying that, “it was an unprecedented ruling serving as a precautionary measure binding Itau and Bancoestado to enter into new current account contracts with the cryptocurrency exchange, Buda, while the case proceeds.” The news outlet also points out that the court directed that the two banks should “sign the new contracts with the exchange under the same conditions and terms described between the parties previously.”

“The foregoing, in as much as the precautionary measures requested are necessary to avoid any eventual negative effect of the conduct that’s been submitted to this court,” the publication quoted the court’s declaration.

Lawsuits against banks

The digital currency trading company “also requested the Tribunal to punish the ten banks with the highest fine established under the DL211 with costs as well as order them to immediately stop the indicated practice without prejudice to any other measures that are considered appropriate to the effects,” the Diario Financiero conveyed.

The publication noted that the crypto exchange accused the ten banks of executing “anti-competitive behavior that consisted of abuse of their collective market dominance positions and by engaging in abusive exploitation which excludes their dominant positions, with the effect or purpose of restricting, hindering, and preventing competition in the markets that have been affected.”

After multiple banks shut down Buda and Cryptomkt accounts last month, the two crypto exchanges called on Chile’s top banking association, the ABIF (Asociacion de Bancos e Instituciones Financieras) wanting it to the issue a statement declaring its clear position concerning the cryptocurrency industry in the country.

The crypto community in Chile has since condemned the bank’s actions terming them as outdated ways of conducting business. Major blockchain and cryptocurrency investors have applauded the court’s ruling. While the case is still in court and the final determination is still pending, the ruling by the anti-monopoly court appears to be a big win for the cryptocurrency industry in the country. The two banks have since re-opened Buda’s accounts as ordered by the court.