Recently, it was announced the closing of the bank accounts of three exchange houses by some Chilean banks. Apparently, this was done without any foundation, as their representatives say they do not violate any law in the country. Could this be just a symptom of a larger discontent felt by regulatory bodies towards the trade of cryptoactives?
Last week, the bitcoiner community received the announcement that the CryptoMKT and Buda exchange houses (formerly known as SurBTC) suffered the closure of some of their bank accounts by some financial entities. Subsequently, the main commercial bank in the country, BancoEstado, made the decision not to work "momentarily" with any company that engages in trade with cryptocurrencies, including the Orionx exchange platform, until the legal landscape in this regard is transparent.
The most remarkable thing about this case is that it was not just a bank that took the measure, but a series of financial entities attacking more than one exchange house. This could point to a government order that has not yet come to light and that aims to affect the exchange of cryptocurrencies in the South American country.
Some members of the ecosystem, such as the Fintech Association of Chile, have had the opinion that the measure taken by these banks could be due to a lack of knowledge about the operation of cryptocurrencies by regulatory entities. However, this country has been a pioneer of blockchain adoption over the years and, with the visibility that cryptoactives have had since 2017, becoming one of the most sought after terms in Google, it is very unlikely that any Latin American regulatory body has not heard of the operation of cryptocurrencies.
In fact, in August of last year, Mario Marcel, president of the Central Bank of Chile, highlighted how the applications of distributed accounting technology and cryptocurrencies would be a solution to improve the Latin American market. This was expressed at a conference given at the Alternative Finance Center of the University of Cambridge.
If this were a case of ignorance of the security and transparency of the cryptocurrencies, perhaps I could reproduce what happened with the Israeli exchange house Bits of Gold, to which one of the most important banks in Israel, called Leumi, stopped providing services alleging that the operations with cryptocurrencies did not allow to execute their protocols against money laundering and money laundering. The court, at that time, ruled in favor of the bank. Subsequently, thanks to an appeal filed by the exchange office, the court determined that the bank should not deny its services to the exchange house, since these fears had not materialized in more than five years.
For the commercial manager of CryptoMKT, meanwhile, the decision taken by Chilean banks could be the answer to the fears and reservations that these institutions may be experiencing with respect to the growth that cryptocurrencies have shown around the world. These fears could be based on the fact that the role that banking has traditionally played as a mediator of financial transactions can be affected thanks to cryptocurrencies and its decentralized system, based on trust between users and the cryptographic algorithms that support each transaction so that it is safe and immutable.
The blockade suffered by these exchange houses reduces the chances of Chileans to safely and comfortably exchange fiat money to cryptocurrencies and vice versa, which could be a way of pressure imposed by the regulators of the local economy to try to reduce the circulation of cryptocurrencies in the country.
Perhaps the most remarkable thing about the Chilean case is that it was not just a bank that took the measure, but a series of financial entities attacking more than one exchange house. This could point to a government order that has not yet come to light and that aims to regulate the exchange of cryptocurrencies in the South American country. It is only to be expected that these regulations do not have the negative impact that they have had in a country like Japan, which have caused the closure of several companies dedicated to this activity for not complying with the Financial Services Agency regulations regarding security. .
In fact, one of the most important exchange houses in the country, Binance, has been subject to persecution by the FSA of Japan, which has prompted her to move to Malta with the aim of finding a territory that welcomes the cryptocurrencies.
For this reason, both exchange houses and users must wait for the government to pronounce on legal matters to act accordingly. While this is happening, the community should come together to find, together, solutions that allow the safe trade of cryptoactives. And among them are, without a doubt, the decentralized exchanges LocalBitcoins and Localethereum.