Brazilian cryptocurrency businesses are about to lose access to all forms of banking services after the country’s top banks started closing their accounts. This follows several months of strained relationships between the two, culminating in legal battles. The closures come after the country’s regulator sided with the banks in their anti-crypto stance.
One of Brazil’s largest banks, Bradesco has refused to honor an agreement with the country’s crypto exchanges that sought to stop it from closing down the accounts. According to a report by Criptonoticias, Brazil’s Administrative Council of Economic Defense (CADE) had sided with the banks in their actions, stating that “there is no evidence of antitrust crimes as a result of the rejection of some banks to establish contracts with certain cryptocurrency exchange platforms.”
The Brazilian Association of Cryptocurrencies and Blockchain (ABCB) protested the decision and requested an agreement with CADE to have the account closures stopped and explore other options. However, according to the report, Bradesco has refused to honor this agreement.
Bradesco considers cryptos to possess high money laundering risk, hence its decision to dissociate itself from the industry. The closures will affect the Brazilian crypto industry greatly, with Bradesco being the third-largest bank in the country, with over 70 million clients.
The account closures is the latest twist in what has been a long battle between the banks and the crypto industry. In 2019, the ABCB took six banks to court, suing them for denying banking services to crypto exchanges. The lawsuit led CADE to open an investigation into the issue, eventually taking the banks’ side and declaring that they were within their rights to deny the exchanges their services. The banks sued by the industry body included Santander Brasil, Bank of Brazil, Bradesco and Brazil’s largest bank, Itau Unibanco.
This isn’t the first time that Bradesco has been caught up in a battle with crypto exchanges. Last year, the bank was sued by M Intermediação e Prestação de Serviço crypto exchange for denying it access to banking services. The exchange won the legal battle, with the court ordering the bank to grant it access to banking services immediately.
In another incident, Walltime crypto exchange won a court battle against Caixa Econômica Federal bank which had closed its account. Mercado Bitcoin crypto exchange also sued and won its case against Santander Brasil for a similar incident. Santander appealed against the decision but the court dismissed the appeal.
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