Citywire - For Professional Investors

Register to get unlimited access to all of Citywire’s fund manager database. Registration is free and only takes a minute.

Chile cracks down on crypto exchanges

Chile cracks down on crypto exchanges

Chilean banks have closed the accounts of three cryptocurrency exchanges, dealing a blow to the country’s budding digital currency industry.

BancoEstado notified popular local crypto platform Orionx on March 29 that it would close its checking account within 10 days, according to a letter seen by Citywire Americas. In response, Orionx filed an appeal on April 2 with a Chilean court to reverse the bank’s decision, legal documents state.

The move by BancoEstado came shortly after two privately-owned banks, Scotiabank and Itaú, reportedly also shut down the accounts of two other exchanges.

In its letter, BancoEstado said the closure responded to its ‘decision, for now, not to operate with firms dedicated to the issuance, creation, brokerage or intermediation, or that serve as a platform, of the so-called or denominated cryptocurrencies.’ 

The bank also said it would keep on using that approach as long as cryptocurrencies aren't regulated. At the moment, Chile doesn’t have specific rules governing digital currencies. 

In its appeal, Orionx said it can’t operate without the account because exchanging physical cash would make it impossible to place crypto trades in real time, among other reasons.

The firm also argues that it is registered with the appropriate authorities and that while local regulation doesn’t explicitly allow cryptocurrencies, it doesn’t forbid it either.

Therefore, Orionx has asked the court to reverse the bank’s decision to shutter the account or to at least give it the 60 days that the firm says the law provides it to close the account.

BancoEstado didn’t respond in time to a Citywire Americas request for comment. 

Digital currency platforms CryptoMKT y Buda.com also hold accounts with BancoEstado, according to local news outlet El Mercurio, which first reported the news. It was these two firms that saw their accounts shuttered by the Scotiabank and Itaú.

The Chile crackdown highlights the fragmented approach of Latin American regulators and financial institutions to crypto. Mexico, for instance, chose to keep tabs on the industry by regulating it with a ‘Fintech Law’ passed in early March. 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Events
  • Citywire Miami 2018: all the pics from day one

    Citywire Miami 2018: all the pics from day one

  • Selector soccer stars: all the photos from the Citywire Miami 2018 matches

    Selector soccer stars: all the photos from the Citywire Miami 2018 matches

  • Citywire New York 2017: All the pics from our fund selector forum

    Citywire New York 2017: All the pics from our fund selector forum

  • Citywire Latin America 2017: check out the pics from day two

    Citywire Latin America 2017: check out the pics from day two

  • Citywire Latin America 2017: all the pictures from day one

    Citywire Latin America 2017: all the pictures from day one

  • Citywire Santiago 2017: all the pics from our fund selector forum

    Citywire Santiago 2017: all the pics from our fund selector forum

  • Citywire Mexico 2017: all the pics from our fund selector forum

    Citywire Mexico 2017: all the pics from our fund selector forum

  • Citywire Miami 2017: all the photos from day one

    Citywire Miami 2017: all the photos from day one

  • Citywire Miami 2018: all the photos from day two

    Citywire Miami 2018: all the photos from day two

  • Citywire Miami 2017: all the pics from our fund selector forum

    Citywire Miami 2017: all the pics from our fund selector forum

  • Wine tasting at the Ritz Carlton Santiago

    Wine tasting at the Ritz Carlton Santiago