Chile Court Ordered the Banks to Reopen Accounts of Crypto Exchanges

Jan 4, 2019 at 10:23 Update Date :Jan 4, 2019 at 10:23 UTC

Crypto industry in Chile is enjoying an optimistic start of the new year. A court ruling came in the favor of the crypto exchanges of the country. The court ordered the banks to keep the accounts of crypto exchanges active.

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The recent court ruling is the latest development of the long-running legal dispute between the leading bank of the country and domestic cryptocurrency exchanges. Last year, the leading banks of Chile, BancoEstado and Itau froze the accounts of crypto exchanges including Buda and Orionx. The exchanges filed a case in the court of law as this represented a restriction of trade.

In a previous ruling, the Supreme Court ordered the banks to stay on their ground and stop offering services to the crypto and blockchain related companies. It seemed that the banks have secured a comprehensive victory in the case when the Supreme Court gave the decision in favor of the banks last month. But the latest ruling completely changed the scenario. The latest ruling comes from the anti-monopoly court. The ruling discarded the decision given by the Supreme Court after the crypto exchanges of the country contested their accounts being closed by the leading banks of Chile.

In a statement, one of the affected crypto exchanges Buda said that:

“The Court of Defense of Free Competition has just ratified its decision to keep open the bank accounts of the cryptocurrency platforms while testing whether banks have indeed tried to abuse their dominant position….the banks would have to reopen the accounts and keep them open for the duration of the trial, to ensure that eventual abuse of a dominant position did not produce irreparable economic damage to the cryptocurrency platforms while the accusation was proven.”

According to the media outlet, Diario Financiero, Chile’s Court of Defense of Free Competition ordered the banks to continue business with crypto exchanges for time being. The Court of Defense of Free Competition said that the ruling of the Supreme Court did not constitute a new precedent and marked an abuse of power. In a blog post, the cryptocurrency exchange Buda stated that according to the ruling, the bankes have to reopen the accounts of the cryptocurrency exchanges and keep them open for the legal process. The ruling also ensures that no irreparable economic damage is done to the crypto platforms.

The Court of Defense of Free Competition also has plans to hold another session in February. In that session, the crypto exchanges and banks will discuss their grievances in front of the Finance Minister of Chile, the Minister of Economy, and the leader of the banks’ associations. According to the ruling, the banks have to reopen the accounts of the crypto exchanges until the final verdict. The final verdict will be issued after considering the evidence from both sides.

Meanwhile, the treasury department of Chile has also started a pilot project for a blockchain powered platform which will allow the banks and suppliers to do the transactions via a decentralized ledger. According to the treasury, centralized systems has led to minor discrepancies in transactions which can be sorted with decentralized blockchain technology. The new platform will help in lowering transaction cost. The government of Chile has a keen interest in blockchain technology and actively exploring a range of possible blockchain technology adoption initiatives.

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