Cryptocurrency is continuing to gain mainstream notoriety and acceptance, and not just among the digital coin community. Cryptocoin markets and exchange sites are earning increasing recognition by courts of law and regulatory agencies around the world. Most recently, this was evidenced by a court ruling against Chile’s central bank, Banco Estada, that ordered the financial giant to provide services to popular digital coin exchange Orionx.
Halo Platform knows that the blockchain technology and cryptocurrency is the future. While it has taken mainstream financial institutions some time – and some gentle prompting by the court system – to embrace cryptocoin markets, they are slowly coming around. Soon, digital coin exchanges, including Halo Platform’s own exchange site, will operate alongside of commercial and national banks providing critical financial services for people around the world.
Chilean State Bank Closes Crypto Exchange Accounts
Earlier this year, Chile's Court of Appeals of Santiago heard an appeal from popular South American exchange Orionx. The cryptocurrency exchange was litigating against Chile’s state bank, Banco Estada, the official, and only Chilean-owned bank in the country. The case arose back in March, when Banco Estada closed Orionx's deposit account, as well as accounts associated with two other cryptocurrency exchange sites—Buda and CryptoMKT. The closing of these accounts meant that users could no longer transfer fiat to the exchange sites in order to purchase cryptocurrency. Needless to say, this was a devastating blow for Chilean cryptocoin markets. In fact, CryptoMKT founding partner, Martín Jofré, stated that as a result of the Banco Estada account closings, his exchange had to return nearly 100 percent of its customers funds. In other words, the exchange site essentially needed to start over from scratch.
Despite this setback, the Chilean digital coin community remains positive. This is particularly true in light of the recent court ruling in favor of the exchange sites. This positive turn of events gives digital coin traders hope the Chilean cryptocoin market will improve in the coming months. At the very least, however, the headline-grabbing litigation will generate more public awareness and mainstream conversation about the topic.
South American Court Rules in Favor of Digital Coin Exchange Site
Banco Estada was the last remaining bank in Chile available to digital coin exchanges, and it decided to close the exchange accounts based on its interpretation of the nation’s financial regulations. The bank stated it based its decision on the fact that Chile's regulations failed to recognize cryptocurrency trading. Banco Estada was also concerned that it was unable to determine whether the digital coin exchanges engaged in illegal activity made possible through cryptocoin markets, such as money laundering and other financial crimes.
The Chilean Court of Appeals, however, ordered Banco Estada to reopen Orionx's accounts, stating that the bank's actions were unconstitutional and constituted "arbitrary and illegal" action. In a blow against cryptocoin market critics, the Court stated that digital coin transactions should not immediately be associated with potential financial crimes, as Banco Estada had done.
This ruling is particularly encouraging to cryptocurrency traders in Chile, who feared the Bank's actions would harm the industry. "They're killing an entire industry,” Buda CEO Guillermo Torrealba opined. “It won't be possible to buy and sell crypto in a safe business in Chile. We'll have to go back five years and trade in person. It seems very arbitrary." However, with the Court of Appeal's favorable ruling, many anticipate the country will begin to officially acknowledge the legitimacy of cryptocoin markets, and potentially even begin to draft cryptocurrency regulations. This represents an important step forward for the mainstream legitimacy of cryptocurrency exchange sites, both in Chile and around the world. This institutional support will prove integral in the development of bigger, better, and safer digital coin trading services, including Halo Platform’s new decentralized exchange site.
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