In recent weeks we’ve looked at the banking industry’s view on the cryptocurrency market. Depending on the argument you believe, the banking sector is either out to destroy cryptos or it’s quietly hoping that it succeeds. One country where the line in the sand has clearly been drawn is Chile. Several of the nation’s leading banks have been actively targeting crypto exchanges and active traders. Taking a stand against what many consider to be highly questionable activity, several crypto exchanges are biting back. According to Bloomberg, Chilean crypto exchanges Orionx, BUDA, and CryptoMKT are set to confront Itau Corpbanca, Scotiabank, and state-owned Banco del Estado de Chile in court.
Unfair and unjust behavior
Banks closing the accounts of crypto exchanges isn’t new. For that reason, the behavior of Banco del Estado de Chile, Scotiabank, and Itau Corpbanca shouldn’t surprise anyone. What is surprising is that the court has agreed to hear the case being brought forward against these three banking superpowers. Banco del Estado de Chile, Scotiabank, and Itau Corpbanca have been public about how they’ve shut down accounts used for crypto trading purposes, but the backlash is now well underway.
The people have spoken
The court has deemed that the accounts of Orionx, CryptoMKT, and BUDA will remain closed at the current time, but there are valid grounds for an appeal to be heard. Coming out in support of the crypto exchanges affected, a new hashtag has been gaining traction on Twitter. #ChileQuiereCryptos – which translates to “Chile Wants Crypto” – shows that Chile has a huge number of people that are demanding cryptocurrency access. It isn’t just Bitcoin that’s been in high demand either, as locally founded coins such as Luka and Chaucha have tapped into the Chilean public’s hunger for cryptos. Summing up the voice – and anger – of the Chilean public, Twitter user and independent trader Hernán Maureira said, “While the world is running hand in hand with this technology, Chile takes a step back.”
More anger than answers
It would have been all too easy for Chilean crypto exchanges to take recent banking sector action lying down, but it appears that they’re more than up for the fight. Guillermo Torrealba (BUDA CEO) has accused the banks involved of “killing the entire industry.” Prior to the ban, BUDA had a trading volume of approximately $1 million per day, so while it wasn’t the biggest exchange, it certainly had a core user base. Torrealba hasn’t been shy when it comes to venting his frustration, “It won’t be possible to buy and sell crypto in a safe [way] in Chile. We’ll have to go back five years and trade in person. It seems very arbitrary.”
In an attempt push the issue, CryptoMKT and BUDA issued a joint statement that directly asked the Chilean Association of Banks (ABIF) to explain its official position on digital currencies and crypto trading. Its response was – not unsurprisingly – weak. The ABIF stated that it wasn’t responsible for resolving any crypto exchange-bank related issue, believing that such matters are the “exclusive competence of each institution.”
Chile’s crypto community bites back
In Chile, it’s pretty clear that banks are attempting to stomp out all things crypto related – crypto exchanges included. While they might be closing accounts, this “war” has only just begun. Expect the related appeal to be a lengthy process, but if the exchanges do manage to come out on top, then it could be a defining court case that sets a global precedent.