Cryptocurrency exchanges and private banks in Chile are still in a legal struggle over the right to open and manage bank accounts. According to a report produced by the exchanges, the vast majority of banks won’t add crypto companies to their lists due to the risk of having to serve other types of customers.
Cryptocurrency Exchanges Still Struggle with Banks in Chile
Cryptocurrency exchanges and cryptocurrency-related businesses in Chile are still battling private banks for the right to access and operate bank accounts. This legal conflict, which started in 2018 when several exchange houses had their banking services revoked by various financial institutions, will be decided in the courts of free competition this year.
Buda.com, a Chilean exchange house, released a document that concluded banks were participating in a conspiracy to deny cryptocurrency exchanges their services for reasons other than those applicable to businesses such as jewelry and watch stores, automobiles, works of art, or antiques. The report also criticized the use and misuse of money laundering in crypto and the lack of clear regulations on crypto as a pretext to take anti-competitive action.
Explaining the Conflict
Private banks are being defended because there are no established protocols for managing the risks of cryptocurrency operations. Money laundering, if it occurs, cannot be detected or managed. On the other hand, exchanges claim that banks are acting against them in the absence of clear laws. 79% of the shutdowns or refusals of service occurred within three months.
Bice Bank, one of the banks involved in the lawsuit, claims it had previously stated that it would not work with companies based on cryptocurrency three years prior to the trial. It also claimed that it had done due diligence and received approval from the anti-money laundering and terrorist financing regulator.
Security Bank, another financial institution, affirmed that it took its decision based on the fact that cryptocurrency exchanges “do not have the necessary regulation to adequately prevent these risks and will not have it in the short term either.”
Nevertheless, regulations in this field are slowly being relaxed. A fintech law covering cryptocurrency was recently approved and passed in Chile. Several exchanges have already opened accounts after signing due diligence agreements. Buda, for example, signed with Bci Bank in October.
What do you think about the legal dispute between banks and cryptocurrency exchanges in Chile? Leave a comment in the section below.
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