Chile’s Supreme Court has recently ordered crypto exchange OrionX to close all of its active local bank accounts.
This decision comes in wake of another order passed by Chile’s High Court that “guaranteed protection” to Orionx and forced local state-owned bank Banco del Estado to allow the firm to operate freely within the nation.
“These characteristics and elements determine, therefore, the current impossibility for the bank to comply with the aforementioned obligations, since it prevents it from knowing in depth the financial activities related to cryptocurrencies developed by the appellant, the most relevant characteristics of its operations, the foundations on which these are supported and, finally, if their amounts are excessive or not,” ruled the supreme court.
At the time of the closures, Scotiabank Chile CEO Francisco Sardón said banks were concerned about compliance:
“There is no persecution of any kind. There is a concern…not only about cryptocurrency but also about money laundering and compliance…(W)e are doing our job.”
In July, the exchanges bought some time when the Chilean Supreme Court called the service interruptions “arbitrary” and ordered banks to restore account services until the case was resolved. But now Chile’s highest court has ruled that the unregulated, unbacked and peer-to-peer nature of cryptocurrency transactions make it impossible for banks to assess their “depth… characteristics…foundations…and amounts.”
It’s evident that this goes back to April 2018, when local crypto trading platforms BUDA, Orionx, and CryptoMarket (CryptoMKT) applied to an appeals court so as to challenge two banks (Corpbanca and state-owned Banco del Estado) that had shut down their accounts.
Similarly, all through April and July, the Antimonopoly Court and the Court of Appeals ordered Itau Corpbanca and Banco del Estado to reopen the accounts of Buda and Orionx. However, since then, the government seems to have changed its tune and now wants the crypto exchanges to shut down for good.