Chile: Crypto Stock loses legal battle underway in Supreme Court ruling.
The Supreme Court of Chile ruled against the Orionx cryptocurrency exchange, allowing a state bank to close its account, local news platform Emol reported on December 4.
Previously, the third room of the superior court had revoked the decision adopted in July that guaranteed the protection of Orionx and forced the local state bank Banco del Estado to reopen its account. The new ruling cited by Emol affirms that the bank acted correctly and did not violate any rule of the Chilean constitution.
In the decision, the judge also said that cryptocurrencies “have no physical manifestation or intrinsic value.” The document states that they are not controlled by the government or by a corporation, citing the characteristics as reasons to allow banks to reject services to the stock market. The court’s decision explains that the nature of cryptocurrencies prevents banks from receiving detailed information about transactions, customers and companies that interact with assets.
In addition, the Supreme Court raised the issue of the illicit use of cryptocurrencies, alleging that cryptocurrencies were involved in money laundering and terrorist financing. Given all these considerations, the closure of the Orionx accounts by the bank was legal.
It was not immediately clear whether the court’s decision applies to two other cryptocurrency exchanges that have filed complaints this year regarding similar closures. The litigation began in mid-April 2018, when the local crypto-monetary exchanges BUDA, Orionx and CryptoMarket (CryptoMKT) were presented to an appeals court to face two banks, the private Itau Corpbanca and the state-owned Banco del Estado, which had closed the accounts of your platforms. The co-founder and CEO of BUDA, Guillermo Torrealba, affirmed at that moment that the decision of the banks to close the accounts was “to kill the whole industry”.
In April and July, the Antitrust Court and the Court of Appeals ordered Itau Corpbanca and the State Bank to reopen the accounts of Buda and Orionx consecutively.
In May, the president of the Central Bank of Chile, Mario Marcel, announced that the institution was considering developing a regulatory framework for cryptocurrencies, in order to manage the risks associated with the cryptocurrency trade. In October, Chilean parliamentarians presented a resolution on the adoption of blockchain that did not focus on cryptocurrencies.
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