Brazilian crypto exchange wins legal battle over closed bank account

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A Brazilian cryptocurrency exchange has won a legal battle with a local bank over the closure of its account. The exchange, M Intermediação e Prestação de Serviço, sued Banco Bradesco, a local retail bank after it suspended its account over alleged unusual activity and suspicion of fraud.

The exchange used the bank account to enable fiat deposits and withdrawals. However, in 2018, the bank suspended the account, stating that its security system had detected unusual movements. This action was meant to prevent fraud, the bank told the court.

In his ruling, the presiding judge said that the court hadn’t found any substantial evidence to support the bank’s decision. He ordered the bank to grant access to the account immediately.

“There is no documentary evidence in the file as to the unusual movements that gave rise to the blockade, whose undoing only occurred after the granting of emergency relief,” the judge stated in his ruling.

This is the latest battle between a crypto exchange and a bank in the South American country. Just days ago, yet another crypto exchange won a court battle against a bank which had closed its account. As reported by Portal do Bitcoin, Walltime crypto exchange won a preliminary injunction against Caixa Econômica Federal which had closed its account.

Walltime’s account held 800,000 reals ($212,000) at the time of closure, Walltime’s lawyer told the outlet. She added, “Given that the nature of Walltime’s activity requires an open bank account in as many institutions as possible to facilitate 24/7 negotiations, Walltime suffered a lot of damage in that period.”

The lawyer, Graziela Brandão, said that the losses incurred due to the account closure amount to over $250,000. Several clients were unable to process their fiat deposit and withdrawal requests, leading to a huge decline in trading volume. The exchange will probably file an indemnity action against the bank in the future over the losses, she said.

Spanish banking giant Santander was also sued by Brazilian crypto exchange Mercado Bitcoin for suspending its account. The bank claimed that it had taken the action due to concerns over the origin of the funds in the exchange’s account. The presiding judge ordered the bank to reopen the account which was reported to hold over $350,000. The court dismissed a subsequent appeal by the bank last month.