Court Forces Chile's Banks to Reopen Crypto Exchange Accounts

Chilean banks cannot close their doors on cryptocurrency exchanges just yet, a judge has ruled.

In late March, Bank Itau and state-owned bank Banco del Estado de Chile informed exchange Buda.com that its account would be closed.

Eight other banks in the country also dropped crypto exchanges without explanation around the same time.

After the initiation of the lawsuit, Torrealba said the banks claimed that they terminated the accounts due to a "Lack of regulation, which is a very bad excuse," he added, since, "They're not the ones that decide what should be regulated and what [should] not."

The banks later shifted their position and cited concerns over money laundering.

On Wednesday the exchanges achieved a victory - if only a temporary one - when the country's Free Market Court ruled that Bank Itau and Banco del Estado must reopen Buda.com's accounts until the lawsuit concludes.

"Basically the industry will continue to develop and it's also very important for the country, not only for the cryptocurrency industry because banks here have too much control over everything. So the fact that they can just kill an industry - a whole industry, a whole technology - just because they didn't like it is very risky for a country."

Elsewhere in South America, several major Brazilian banks are also embroiled in lawsuits with crypto exchanges over closed accounts.

The Reserve Bank of India recently announced that the institutions under its regulatory domain are prohibited from engaging with crypto-related firms.

This prompted aspiring exchange CoinRecoil to file a petition with the High Court of Delhi in hopes of overturning the decision, with the next hearing due in May. South Korea and Japan have also recently strengthened regulations governing exchange bank accounts by implementing anti-money-laundering and know-your-customer requirements.