Business 11 March 2019Erik Gibbs
Seized bank funds to be returned to Brazilian crypto exchange
In February, a Brazilian court judge ruled that Banco Sicoob must return funds belonging to cryptocurrency exchange Mercado Bitcoin that had been frozen by the financial entity. The bank had unsuccessfully tried to overturn a previous court ruling and was ordered to return around $350,000 to the exchange. It attempted to appeal the decision again, only to find its appeal meet the same fate.
The bank had tried to argue that the exchange was operating in contradiction to the bank’s policies. However, the courts disagreed more than once and the latest and final decision was published on March 6 on Brazil’s official government site, Impresa Oficial. That decision adds that the ruling was made unanimously and the bank is ordered to make restitution, as well as pay an additional 10%, all legal expenses and 1% in monthly interest.
The decision is a significant victory for cryptocurrency companies in Brazil and, possibly, in other countries. Financial institutions in countries across the globe have overstepped their authority and tried to prevent crypto from gaining ground against fiat. Their obvious bias toward fiat and desire to maintain power shows exactly why crypto is needed and why it will not only survive, but will become more popular than government-backed currencies.
Brazil is definitely not alone—the same power trips have been seen in countries like South Korea, Canada, India, Chile and more. To date, in most cases, the courts have sided with the crypto companies, which should be enough for the banks to realize that they need to think twice before taking action. However, it is still going to be an uphill battle for the crypto ecosystem.
Banks get it—they get why crypto is here and where it is going. They try to use the excuse that digital currencies are not regulated or fall out of the scope of their operations in order to suppress crypto growth, but the real reason for their actions is obvious and has already been acknowledged by banking giants such as Bank of America (BoA). Early last year, an executive at BoA stated that crypto is forcing the financial institution to fear for its business model. That’s the same as if a technology company says that a newer tech is threatening its business model—that’s the way the world works and is evolution of industry.
However, it doesn’t give the banks the authorization to illegally try and keep crypto from advancing and the courts are repeatedly showing the banks that they’re wrong.
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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