The conflict between banks and cryptocurrency exchanges in Chile is still developing as some banks are reluctant to serve this type of institution. A new report prepared by exchanges reports that most of these banks are refusing to accept crypto companies as customers for risks that are nevertheless managed in serving other types of customers. Cryptocurrency exchanges are still fighting banks in Chile Cryptocurrency exchanges and other crypto-related companies are still actively fighting private banks for the right to open and operate bank accounts in Chile. The legal battle, which began back in 2018 when a number of exchanges had their bank accounts blocked by several...
The conflict between banks and cryptocurrency exchanges in Chile is still developing as some banks are reluctant to serve this type of institution. A new report prepared by exchanges reports that most of these banks are refusing to accept crypto companies as customers for risks that are nevertheless managed in serving other types of customers.
Cryptocurrency exchanges and other crypto-related businesses are still active Battle Private banks for the right to open and maintain bank accounts in Chile. The legal dispute, which began back in 2018 when a number of exchanges had their bank accounts closed by several banking institutions, will be decided this year by a national court for free competition.
Buda.com, a Chilean exchange, prepared a document that concluded that banks collude to deny their services to cryptocurrency exchanges for reasons that apply to other companies, such as companies dealing in jewelry, watches, vehicles of all kinds, works of art or antiques.
Regarding these companies, the document states that they are “generally recognized as a possible means of money laundering – and which, moreover, are regulated as obligated subjects in comparative law but not in Chilean law,” and criticizes the use of money laundering and the lack of clear regulations in crypto as a mere pretext for non-competitive measures.
The private banks' defense focuses on the fact that there are still no defined risk management protocols associated with cryptocurrency operations and that money laundering activities, if they occur, could not be detected and dealt with. However, exchanges debate that banks are taking action against exchanges based on no clear laws, with 79% of closures or denial of service events occurring in a three-month period.
Bice Bank, one of the banks included in the lawsuit, says it had stipulated three years before the trial began that it would not work with cryptocurrency-based companies, stating that it would only do so subject to due diligence and approval from the anti-money laundering and terrorist financing regulator.
On the other hand, Security Bank, another financial institution, explained that its decision is based on the fact that cryptocurrency exchanges “do not have, and will not have, the necessary regulation to adequately prevent these risks in the short term.”
However, regulation in this area is slowly coming apart, like Chile approved and recently approved a fintech law that includes cryptocurrencies within its scope. Some exchanges already have it open Accounts after signing due diligence agreements, as Buda did with Bci Bank in October.
What do you think about the legal conflict between banks and cryptocurrency exchanges in Chile? Tell us in the comments section below.
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