Business 28 March 2018Erik Gibbs
Chile cryptocurrency exchanges call out banks for service refusal
Why can’t we all just get along? Two cryptocurrency exchanges in Chile are embroiled in a battle with local banks who have refused to provide them service. Chile’s BUDA and Crypto MKT exchanges had their accounts closed, making it impossible for them to operate. The exchanges were told by the banks that no accounts for anyone in the cryptocurrency industry could be opened.
The two exchanges issued a statement in regards to the action, stating, “The lack of knowledge and regulatory clarity has given rise to the fact that some banks, out of fear, misinformation or perhaps by strategy, are refusing to provide their services to anyone who has any relationship with any digital asset. In Chile the regulation is in the hands of a few, who are acting as de facto regulators and are opting to prohibit.”
The pair is hoping that Chile’s Asociación de Bancos e Institutiones Financieras (Association of Banks and Financial Institutes or ABIF using its Spanish initials) will get involved. They have requested that the ABIF clarify its position on cryptocurrencies and provide guidance over whether or not financial institutions can legally prohibit cryptocurrency-based companies from opening or maintaining bank accounts.
In making their statement, both BUDA and Crypto MKT point out the fact that they have created platforms that are secure and use the latest technology to protect their clients. They also openly detail the pros and cons of crypto trading and work with authorities to maintain transparency. The two exchanges are registered with financial authorities, pay their taxes and adhere to government policies to prevent users from participating in money laundering or terrorism financing.
Chile isn’t the only country where there has been friction between banks and cryptocurrency-based businesses. Last year, there were reports of Australian banks freezing bank accounts that were used to send money to cryptocurrency exchanges. In February, it surfaced that Dutch banks were denying service to those in the crypto world. Blockex, a cryptocurrency exchange in the UK, said last year that no bank was willing to give it an account.
However, there is at least a dim light of hope. Israel’s Supreme Court last month upheld an order against Bank Leumi that now forces the bank to allow crypto companies to open accounts.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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