The Supreme Court in Chile has issued a decision allowing the state bank Banco del Estado de Chile to close the account of cryptocurrency exchange Orionx on concerns over the nature of transactions being conducted on the exchange.
The ruling, reported by local news outlet Emol, reverses earlier decisions of the country’s Court of Appeals, and its anti-monopoly court, that had allowed the bank accounts of Orionx and several other plaintiffs to remain open.
According to the Supreme Court’s third division, the bank did not violate the Constitution, and that its acts did not arbitrarily curtail Orionx’s rights.
The decision stated that the assets being traded by Orionx, including ETH, XRP, LTC, and BTC, lacked physical manifestation and had “no intrinsic value,” in that they were not backed by any government or company. Rather, the digital currencies were viewed as controlled in a decentralized network of users.
The Supreme Court said that because of the nature of the assets, the bank could not comply with regulations requiring specific identities involved in transactions, which made the closure of the accounts justifiable.
The Banco del Estado de Chile was one of 10 banks that had closed accounts of cryptocurrency-related companies. Aside from Orionx, Buda and Crypto MKT had filed complaints with the anti-monopoly court of Chile. The move of banks to deny services to those in the cryptocurrency sector had been criticized as the act of a few in positions of power, who had not recognized measures put up by the companies to promote transparency and security.
Other countries’ banking sectors have shown greater openness to provide services for those using blockchain and cryptocurrencies, though not without conflict among regulators. Switzerland, where ‘Crypto Valley’ Zug is located, has had the government study how blockchain companies could be assisted in opening up bank accounts. Also, the Hypothekarbank Lenzburg has moved to accommodate such companies. However, the Swiss Financial Market Supervisory Authority (FINMA) has maintained a tough stance, requiring invested cryptocurrency assets to be covered by eight times their amount in fiat, to take into account the perceived risk associated with volatility of cryptocurrencies.
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The Indian government must release its finding on cryptocurrencies within two weeks, as ordered by the country’s Supreme Court that is currently hearing petitions against the present ban on cryptocurrency-related companies dealing with banks.
Cryptocurrency exchange Wazirx CEO Nischal Shetty was reported by news.bitcoin.com as saying, “Supreme Court has asked govt. to file an affidavit related to the findings of the crypto committee set up by them. They’re supposed to submit this within two weeks.”
The Reserve Bank of India’s (RBI’s) banking ban was contested at the Supreme Court by some of the country’s cryptocurrency exchanges as unconstitutional. The committee assigned to draft the report was supposed to submit it last September. No indication has been given as to whether it would maintain the RBI’s position that cryptocurrencies were not money.
Shetty said, “We don’t know what the committee report contains as of now… What we can expect is much more clarity about crypto from a government point of view. That’s a good step forward.”
As popular as cryptocurrencies have become in India, the local industry remains uncertain about its future. Cryptocurrency exchange Unocoin had just set up the country’s first cryptocurrency ATM last week, but authorities soon after shut it down and confiscated the machine, as well as arrested co-founder Harish B.V. India’s Central Crime Branch said that Unocoin had no permission to install the machine and that the company was “dealing in cryptocurrency outside of the remit of the law.”
While some countries’ governments have expressed the same concerns about purchasing cryptocurrencies, such as that it encouraged illegal transactions or made people vulnerable to scams, not all of them have implemented prohibitions or severely inhibited related business operations. Still, increased regulation is becoming more a matter of course, for the purpose of consumer protection.
Japan’s Financial Services Authority (FSA), for example, is considering rules for the management of customers’ assets, such as limitations for margin trading with cryptocurrencies.
The UK is deliberating regulations that would put the cryptocurrency industry under the purview of its Financial Conduct Authority. The UK Parliament’s Treasury committee has warned of the volatility of cryptocurrency prices, and its possible use for illegal activities.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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