At the end of March, the banks of Bank Itau and Banco del Estado de Chile informed the Buda.com exchange that its accounts would be closed. Approximately at the same time, eight other banks ceased to provide crypto-exchange services without any explanation.
This forced Buda.com, according to CEO Guillermo Torrealba, to sue all 10 banks for “abuse of the dominant position”, writes CoinDesk.
After the start of the trial, the banks stated that they had closed accounts due to “insufficient regulation”. Torrealba called this statement “a bad excuse,” adding that “banks do not decide what should be regulated and what is not.”
Later, banks changed their position and now refer to concerns about money laundering.
However, on Wednesday the exchanges succeeded, albeit temporarily, when the Chilean Free Market Court ruled that Bank Itau and Banco del Estado should restore Buda.com’s accounts until the trial is completed.
Torrealba called this decision “a good sign” and added that the consequences of the case will go beyond one trial:
“The industry will continue to develop, and this is very important for the whole country, and not just for the cryptocurrency industry, as the banks here have too much power. They can actually kill the industry – the whole industry, the whole technology – because they don’t like the fact that it creates too many risks for the country.”
In another South American country, Brazil, several large banks are also involved in legal proceedings with crypto-exchanges because of closed accounts.
This problem is not unique to South America. The Reserve Bank of India recently reported that it is forbidden for regulated institutions of the country to work with firms related to cryptocurrencies. This prompted the CoinRecoil Exchange to file a petition with the Supreme Court of Delhi in the hope of challenging the decision. The next hearing is scheduled for May.