A court in Chile has ordered two of the country’s largest commercial banks to offer account services to a local cryptocurrency exchange, in a decision that could set a precedent for the wider digital currency industry in the country. The Free Competition Defense Court ordered Banco Itaú and BancoEstado to open account services for local digital currency exchange Buda.com. The court agreed that the banks had insufficient evidence that the local crypto exchange had been linked to a Ponzi scheme and said the denial of service represented a threat to free competition.
The bank had closed Buda’s account in 2018.
Chief Legal Officer at Buda, Samuel Cañas, welcomed the court’s decision to support Buda in securing basic banking services, Diario Financiero reported. “The Chile bank has not been able to present sufficient information to dismiss the serious presumption of acts that threaten free competition that the Court determined to grant the precautionary measure in favor of Buda.com.” Buda’s bank accounts were closed by the respective banks in 2018, following an investigation into a rogue finance company, Terra Finance.
The court found no evidence linking Buda to the Ponzi scheme.
The case came to light after four investors reported losses of 100 million Chilean pesos ($200,000), alleging Buda did nothing to prevent the frauds. “Buda is indirectly allowing the use of Itaú’s systems by other cryptocurrency exchanges, of recognized risk, without being able to do anything about it.” The court found no evidence linking Buda to the Ponzi scheme. However, according to Buda’s CEO, the legal battle still has some way to run. “The new information presented does not undermine the serious presumption of the right that is claimed or of the facts denounced in the lawsuit.” he added.