- Crypto exchanges in Chile continue to mount legal action against the country’s leading banks.
- The Fourth Chamber of the Court of Appeals of Santiago ruled that Banco Estado’s behavior against Orionx was “arbitrary and illegal.”
- Recent court rulings mean that the Central Bank of Chile is exploring the idea of developing a regulatory framework for cryptocurrencies.
It would be fair to say that Chile has a complicated relationship with the cryptocurrency market. Back in April, we looked at how the banking sector has sought to cut ties with anything related to crypto trading and crypto use. Adding an extra twist to the tale, the exchanges did not take this lying down, as a legal challenge was brought forward. This legal challenge has reached its conclusion, with crypto exchange Orionx winning its court appeal. It means the state-owned bank Banco Estado will now reopen the company’s deposit account.
Banco Estado’s Questionable Actions
Courts ruling in favor of crypto exchanges is an emerging trend, as Orionx is the latest name to legally get the better of Chile’s leading banks. The decision came from the Fourth Chamber of the Court of Appeals of Santiago, who accepted that Banco Estado did not have the right to close Orionx’s deposit account in March. The bank’s argument behind the account closure was a lack of “regulatory recognition of [cryptocurrency trading],” but Orinox had rightful doubts about this justification.
While Banco Estado’s resistance is clear, the bank now has no choice but to reopen Orionx’s account and remove any restrictions from its use. The court made it clear that the bank’s actions were “arbitrary and illegal, constituting 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.” The statement from the court is pretty definitive, with it giving hope to other banks in Chile that are currently suffering from similar issues.
More Exchanges are Fighting Back
This isn’t the first major ruling of its kind, as two other banks have also felt the wrath of Chile’s legal system. Back in April, the country’s anti-monopoly court stepped in to question the behavior of Itau Corpbanca and Banco del Estado de Chile. After further court rulings, both banks had to reopen the previously closed accounts of crypto exchange Buda. Then, just a few weeks after this, in the wake of this ruling, Mario Marcel (Central Bank of Chile President) revealed that the bank was discussing the idea of developing a regulatory framework for cryptos. Facing a future that needs to be crypto inclusive, this move will supposedly help the bank better manage the risks associated with crypto trading.
Is South America Becoming Crypto Friendly?
South America is becoming a cryptocurrency friendly continent – just look at how Bitcoin has helped saved the Venezuelan people. Chile now appears to be coming around, even if the banks are having to face legal ramifications for how they’re treating the country’s crypto exchanges.
