- TDLC asks banks to keep crypto platform accounts open
- Crypto exchanges have accused banks of abusing their dominant position
- The country is still awaiting crypto regulations promised by Finance Minister
The anti-monopoly court in Chile has ordered banks to reopen bank accounts for local cryptocurrency exchanges. The country’s Supreme Court had ruled last December that the state-owned Bancoestado was right in unilaterally closing bank accounts for Orionx cryptocurrency exchange.
Overturning Supreme Court’s Decision
A report appearing on January 2, 2019, copy of local financial news outlet Diario Financiero, quoting a statement from buda.com, found out that the anti-monopoly court, the Tribunal de Defensa de la Libre Competencia (TDLC) had a majority of its members in favor of cryptocurrency firms. The blog post stated:
“Today, after a vote of its ministers, the Court of Defense of Free Competition responded to the request of the banks with a “There is no place.” That is, the measure that ensures that cryptocurrency platforms have bank accounts to operate continues.”
Chilean banks decided to unilaterally shut bank accounts belonging to all cryptocurrency firms at the beginning of the year 2018. This caused the affected crypto platforms to file an appeal against the banks in the appeals court besides seeking for the intervention of the TDLC against 10 of the banks they accused of “abuse of dominant position.”
As per the TDLC ruling, the banks have been asked to reinstate the cryptocurrency firms’ accounts and keep them running during the entire duration of the trial and ensure that their ability to abuse a dominant position doesn’t cause irreparable economic damage to cryptocurrency exchanges until they can prove their case or otherwise.
The Chilean Supreme Court had in November 2018 ruled the banks had the sole discretion to close any client’s bank accounts using their internal criteria claiming they could be associated with money laundering since the country’s law does not regulated them. Last month the banks appealed to TDLC to allow them to continue denying cryptocurrency exchanges banking services.
The hearing of the case filed by the cryptocurrency exchanges continues in February when the arbitrator, TDLC will listen to submissions from both parties. The hearing is expected to become a high-profile hearing that is expected to be attended by top officials of the Chilean government including Finance Minister Felipe Larrain, Minister for Economy Jose Ramon Valente and the president of the bankers’ association Segismundo Schulin-Zeuthen.
In its resolution, TDLC has clarified that the Supreme Court’s ruling cannot be used as judicial precedence to undo previous resolutions. TDLC continues to grant protection to crypto exchanges as the county awaits the fulfillment of a promise by the finance minister to come up with crypto regulations as soon as possible, which the minister claims is a process in progress.