In an ongoing dispute between banks and cryptocurrency exchanges in Chile, an appeals court has finally ruled in favor of one crypto exchange against one of the largest banks in the country. Five major banks have also separately responded to lawsuits against them in court.
Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space
Court of Appeals Ruling
The Fourth Chamber of the Court of Appeals of Santiago has ruled in favor of cryptocurrency exchange Orionx against Banco Estado for closing its account, local media reported. The ruling, which orders the only government-owned bank in Chile to reopen the exchange’s account, was published on Thursday.
The court decided that the bank’s action constitutes “an arbitrary and illegal action, which constitutes a deprivation of the right protected by Article 19 No. 2 of the Political Constitution of the Republic, that is, the right to equality before the law,” La Tercera quoted the ruling.
By closing the exchange’s account, the bank is preventing Orionx “from developing an activity that, although not regulated, does not prevent the bank from adopting less intensive security measures such as the development of effective monitoring and control programs before the final closure of the account,” Emol news outlet cited the ruling. The publication elaborated:
The document refers to breaches of contract and the impossibility of Banco Estado to determine that Orionx engages in money laundering with the currencies with which it operates.
While acknowledging the risks associated with crypto transactions, the court explained that businesses using them “as new forms of investment and payment…cannot necessarily be identified with the commission of criminal acts.”
Banks Responding to Lawsuits
A few lawsuits have been filed against the country’s major banks with the Court for the Defense of Free Competition (TDLC – Tribunal de Defensa de la Libre Competencia).
Orionx sued six major banks last month for abusing their power and quashing its crypto payment business. Previously, another crypto exchange, Buda.com, filed a lawsuit against ten banks for closing its accounts and well as the accounts of another local crypto exchange, Cryptomkt. The antitrust court subsequently ordered three banks, including Banco Estado, to reopen the crypto exchanges’ accounts while the lawsuit is still pending.
On Friday, Diario Financiero reported that five banks have responded to the lawsuit against them before the TDLC. The banks are Santander, Banco de Chile, Banco de Crédito e Inversiones (Bci), Scotiabank, and Itaú. The exchanges allege that they abused their dominant position when they either closed the accounts of or denied opening them for crypto exchanges.
Santander wrote in its response letter that “the use of a current account would not be essential for the digital currency traders,” the publication conveyed.
Banco de Chile responded:
The closing of Cryptomkt’s current accounts is not based on the alleged danger of the activity carried out by the plaintiff or because it is not regulated by the authority, but…in the absence of concrete information that allows Banco de Chile to develop the due diligence in the matter of money laundering, since it is required to justify the transactions in the current accounts.
Bci denied any abuse of a dominant position, stating that it would be difficult to do so because crypto “is a practically decentralized market, with a large number of actors, according to public information available.”
What do you think of the Appeals Court’s ruling? Let us know in the comments section below.
Images courtesy of Shutterstock and Orionx.
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The post Chile Appeals Court Rules in Favor of Crypto Exchange Against Bank appeared first on Bitcoin News.
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