The court has ordered Chilean banks to reopen the current accounts of various crypto exchanges. Following the orders, major banks has reopened the accounts of prominent exchanges like Buda.com and Cryptomkt have stated functioning again. The first among these is Bancoestado which has already made arrangements to reopen the bank account. This means that crypto exchanges can now resume their operations in the upcoming days.
However, they are the only public bank in Chile that has finalized “the first [re]opening of a current account for Cryptomkt, as confirmed by Martín Jofré, founding partner of the cryptocurrency platform.” The Tribunal for the Defense of Free Competition (TDLC), ordered the three largest banks in the country to reopen the accounts of these exchanges. However, the order could be limited to the two exchanges and three major banks- Scotiabank, Itau and Bachoestado.
The other two banks appealed against the orders in court. However, their plea was rejected, and they were asked to follow the instructions of the tribunals and reopen the account of these exchanges while the case is pending. Scotiabank Chile is a unit of the Canadian Scotiabank while Itau is the subsidiary of Itau Unibanc, a Brazilian bank.
Jofre suggested that the exchanges will have to start from scratch when they open new accounts. When their banking relationship ended some time ago, the institutions returned “in five days they returned 99.8% of the funds to the clients of Cryptomkt, so now they will start from scratch.” Diario Financiero said that the exchange expects to resume the digital currency transaction market in Chile in the coming days.”
Bancoestado has been in talks with Cryptomkt but Buda.com has not confirmed anything about their relationship. Samuel Canas, the legal manager of the exchange said after the court order than they would continue to “completely discredit the accusations presented by the banks in their brief, which demonstrate a serious ignorance of our business and the economic institutions that support our activity.”
While talking about this decision on Friday, La Tercera quoted the Bravo law firm and said that the only recourse with the financial institutions is to move to the Supreme Court. The firm suggests that “even if that happens, they must make effective the reopening [of crypto exchanges’ bank accounts] ordered by the TDLC.”
At a time when cryptocurrency exchanges are having a hard time surviving, regulatory pressures are adding up to the plight of the customers, coupled with consistent low coin market capitalization. The number of scams unveiling each day is also growing, which is driving casual investors away and creating a stronger barrier to entry among new investors.
Because of these issues, the Chilean institutions are growing increasingly aware of these frauds and they want to keep themselves away from the issues of volatility. Now, the results of the next hearing about the next two banks will be heard. It is still uncertain whether the new order will be able to make any difference in the cryptocurrency market in the country. However, if the order is not repealed, it could mean a new life in the dying sector.
