Brazilian Court: Bank May Close Crypto Exchange Bank Account
In a move that could change the crypto-scape, Brazil’s high courts declared that banks in the nation have the authority to close accounts held by crypto exchanges. The court also decided that banks may do this without having to justify their actions in any way.
As reported by a local news organization, the court’s final judgement on the matter was a result of a case with Itau Bank against Mercado BTC exchange.
Although their decision had been based on facts pertaining to the single case, analysts believe the decision will ultimately become a precedent in cases similar to this.
Last August, Foxbit’s Natalia Garcia pinpointed the importance of bank accounts for exchanges, and that the court’s decision may signal an end to the sector.
Arguments for and Against
Both parties had significant arguments throughout the duration of the case. Consumers in support of the exchange discussed the concept that closing its account violates their rights as it is essential to their operations.
Nonetheless, the exchange continued to believe that they had legal validation, and that they can decide to close accounts if they choose to. the law was on their side.
The case has reportedly been ongoing since back in 2015, and that various exchanges were having a similar issue.
Crypto enthusiasm was recently trending upwards in Brazil, and many leaders of the nation’s finance sector have been made aware.
Regulators in Brazil also seem to be calming down in regards to tech in recent months, but authorities issued guidelines earlier in the year describing ways in which funds can be invested into assets abroad.