Chilean Banks Ordered to Re-Open Accounts of Crypto Exchange Buda

Buda to normalize operations but lawsuit continues

by Maya Bogdanova
26 April • 2 min
In Regulation

Chile’s anti-monopoly court has ordered Banco del Estado de Chile and Itau Corpbanca to re-open the accounts of local cryptocurrency exchange Buda, a ruling published on Wednesday revealed.

The court order obliges the aforementioned banks to establish new contracts for the opening of Buda’s current accounts, maintaining the same terms that had been established in the prior commercial agreement.

“We now hope to resume payments and withdrawals in pesos again as soon as possible, and normalize operations in the Chilean market. Our struggle is symbolic – it is the struggle of the entire cryptocurrency industry. There is still a long way to go, but this ruling is an excellent sign,” Buda said in a statement.

Last month, 10 Chilean lenders said they would shutter the accounts of crypto exchanges Buda, Orionx and CryptoMarket. At the time, Banco Estado revealed it decided to “not operate with companies that are dedicated to the issuance or creation, brokerage, intermediation or serve as a platform for the so-called cryptocurrencies.” Itau Corpbanca CEO Milton Maluhv claimed the bank supports startups and new technologies while arguing cryptocurrencies need more regulations.

Buda responded by filing a lawsuit against the lenders, describing their move as “arbitrary” and “unjustified.” The exchange’s legal action remains ongoing.

hammer-book

The banking blockade also triggered a strong negative reaction by Chile’s crypto community, with users claiming the move was aimed to hinder trade with digital currencies.

Local news outlets have been speculating the blanket ban comes from the government, as Chile’s Financial Stability Council — an organization with representatives from the country’s central bank, the Finance Ministry, and the securities, banks, and pension funds regulator — issued a warning on cryptocurrencies shortly before banks started shutting down the accounts of the exchanges.

The cryptocurrency sector is not regulated in Chile, however, Buda and other leading exchanges in the country insist they follow self-regulatory rules and also comply with rules imposed on any financial firm.

The Chilean cryptocurrency market is relatively small, but growing fast after last year’s sector boom. Buda, the Latin American country’s largest exchange, was registering a daily trading volume of around USD 1 million prior to the closure of its bank account, which now dropped to around USD 160,000, according to industry tracker CoinMarketCap.