Two banks in Brazil, Banco de Brasil and Santander, were forced to reopen the accounts belonging to local cryptocurrency exchange Bitcoin Max, following a decision made by the Federal District and Territorial Court (TJDFT).
On Tuesday, local news outlet Portal do Bitcoin reported that the court granted an injunction compelling the two banks to reopen Bitcoin Max’s accounts—or risk paying the fines. Initially, the order had been denied by a judge in the lower courts, which caused the lawyer of Bitcoin Max to file for an appeal with the Federal District Court.
In the Federal Court, Judge Ana Catarino ruled in favour of the exchange citing that the two banks had acted against the law. In her decision, Catarino stated that the banks did not issue notifications prior to closing the exchange’s accounts, a conduct she described as abusive and violated the Central Bank of Brazil Resolution No. 2,025/93.
If Santander and Banco do Brasil had failed to comply with the decision, they would have to pay fines amounting to $1,350 and $5,400 respectively, according to the report.
Leonardo Ranna, lawyer for Bitcoin Max, confirmed to local reporters that the exchange’s bank accounts “have been restored,” alongside those of its partners.
The case against Banco de Brasil was filed on September 12. The initial injunction was denied but after appealing, adjudicator Fatima Rafael from the Federal District Court ruled against the bank. Rafael gave the financial institution a 24-hour period to reopen the accounts or face a fine of $540 per day. Banco do Brasil reportedly held $32,300 of money belonging to the exchange.
The ruling comes several months after the Brazilian government’s antitrust watchdog, the Administrative Council for Economic Defense, has launched an investigation into the country’s banks, which were allegedly abusing their power to undermine domestic cryptocurrency exchanges.
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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Brazil’s largest cryptocurrency exchange, Mercado Bitcoin, has reportedly fired 20 of its employees. The exchange claims that the decision was made in order to allow the company to focus on better governance and create a more professional customer service. The announcement has left the crypto exchange’s staff distraught, according to news outlet Portal do Bitcoin report.
The exchange operator noted the layoffs happened only in the marketing, Human Resources and administrative departments; other units were left unscathed. In an interview with Portal do Bitcoin, four of Mercado Bitcoin’s ex-employees described the situation as “horrible.” However, the exchange operator claimed that, “Regarding financial and personnel data, Mercado Bitcoin does not disclose its information to the market but clarifies that the number of people who left the company in October is significantly lower than indicated, reaching 20 people only if we include consultants and other service providers.”
The ex-employees revealed that the first people to be laid off were the senior executives, who were let go on October 15, while other employees were fired by an executive the very next day. It was noted that the company fired the employees it hired from other companies less than six months ago. Some of the employees had reportedly been working at the crypto exchange for less than two months.
The company justified its actions by stating that it was restructuring some of its departments. However, an employee claimed that there had been a gradual deterioration of the work environment at the company as their work volume decreased over time and they spent a longer time achieving their work goals. One of the employees commented, “We created processes and presentations but everything kept getting stuck. Things that we did in an hour, now started being done in two days. Some people were really idle. I had nothing to do.”
Currently, Mercado Bitcoin manages 30% of the total Bitcoin Core (BTC) volume in Brazil. In September, it traded 4,150 BTC; however, the volume was reduced to just 1,965 BTC in October. The decline could have been caused, in part, by a new player arriving on the Brazilian crypto exchange scene. Huobi, one of the largest exchanges around the world by trading volume, recently made its entrance into the Brazilian market.
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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The Administrative Council for Economic Defense (CADE), Brazil’s antitrust regulator, has served cryptocurrency exchanges under its jurisdiction with an ultimatum—complete a questionnaire by October 19, or risk a fine of up to $25,000.
According to local press reports, the questionnaire was sent to cryptocurrency businesses last October 1, following an investigation launched by the Brazilian Association for Cryptocurrency and Blockchain into how financial institutions viewed the cryptocurrency sector.
Earlier in 2018, CADE launched a separate investigation into Brazilian banks over allegations they were intentionally harming cryptocurrency businesses, which the regulator said was a potential abuse of power.
According to the regulator at the time, mainstream banks were “imposing, restricting or even prohibiting… access to the financial system for cryptocurrency brokerages.”
The latest questionnaire is to be completed and returned promptly to the regulator, with even an ‘unjustified delay’ in response liable to a fine. In a note sent with the document to relevant businesses, the regulator made their expectations clear.
“In accordance with art. 40 of the Law 12,529 / 2011, the refusal, omission or unjustified delay of the requested information or documents constitutes an offense punishable by a daily fine of R$5,000.00 (five thousand reais) [about $1,270], and may be increased by up to twenty (20) times, if necessary to ensure its effectiveness, because of the economic situation of the offender,” the CADE stated.
The questionnaire asks cryptocurrency exchanges whether they have encountered problems with banking services, such as having bank accounts closed, as well as examining the attitude of exchanges towards illegal uses of cryptocurrency.
The regulator has allowed for some responses to be submitted in private, although it remains to be seen whether this guarantees any level of discretion or anonymity.
Based on the findings of the questionnaire, it is expected that CADE will return to consider whether further action is required to prevent the mainstream finance sector from unduly impeding the growth and development of crypto markets.
With the situation in Brazil reflected elsewhere in the world, all eyes will be on the Brazilian regulator’s response to these alleged abuses of power from the traditional banking world.
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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Brazil’s largest independent brokerage firm Grupo XP has made plans to put up a cryptocurrency exchange in the country, to take advantage of high demand for virtual currencies, according to Bloomberg.
Grupo XP CEO Guilherme Benchimol said at an event in Sao Paulo that of the over 200 million people in Brazil, about three million are already holding BTC, while only about 600,000 are invested in stocks.
“I must confess, this is a theme I’d rather didn’t exist, but it does. We felt obligated to start advancing in this market,” Benchimol said.
Grupo XP is the owner of XP Investimentos, that offers brokerage services for stocks and various funds.
The planned cryptocurrency exchange, dubbed XDEX, will have 40 employees, and will allow for the trading of BTC and ETH.
News outlet Blockchain Focus noted that XP Investimentos had registered the ‘XP Bitcoin’ mark back in October 2017, prompting speculation that the firm was interested in expanding into cryptocurrencies. It had also registered ‘XP Coin Intermediacao’ in August 2017, which would later become XDEX.
Benchimol’s pronouncement is timely, coming just as the Brazilian government’s antitrust watchdog, the Administrative Council for Economic Defense, begins an investigation on whether the country’s banks had abused their power by limiting cryptocurrency exchanges’ access to financial services, after reports from some exchanges that banks had closed their accounts without due explanation.
The banks, such as Banco do Brasil, Banco Bradesco and Itau Unibanco, have claimed to be merely following anti-fraud requirements, as implemented by the country’s central bank, and that many exchanges have been unable to provide sufficient client data.
Last month, Brazilian exchange Atlas Quantum was hacked, wherein private information of over 264,000 users was compromised. The exchange, however, denied that any funds were stolen.
Last July, it was reported that members of an international criminal network were using BTC to transfer millions of dollars. Twelve individuals in Brazil were arrested in connection with this.
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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The Administrative Council for Economic Defense, an official antitrust watchdog of the Brazilian government, has launched an investigation into the country’s banks, which were allegedly abusing their power to undermine domestic cryptocurrency exchanges.
On Wednesday, Reuters reported the investigation, which was opened on Sept. 18, will determine whether banks decision to restrict cryptocurrency brokers is harmful to the domestic crypto market. The Brazilian Association of Cryptocurrency and Blockchain (ABCB) requested the investigation back in June after Atlas Quantum, a bank in Brazil, closed accounts belonging to crypto companies.
The investigation will look into several banks in the country, including Banco do Brasil, Banco Bradesco, Itau Unibanco, and Banco Santander Brasil, according to the report.
Cryptocurrency exchanges filed to have the matter investigated to stop banks from closing their accounts without proper explanation. Exchanges hope that the investigation will help solve this issue and have their accounts opened or be given a way forward.
Reuters expect the investigation to cause another clash between the banks and crypto exchanges in the country. The banks are denying the allegations and claim that accounts belonging to the cryptocurrency brokers were closed because of missing client data, which they say are crucial in keeping the accounts open. The banks claimed they had to close the accounts to avoid backlash from the central bank.
CADE officials noted that the conduct by the bank was not unreasonable, saying that by applying such restrictions, the financial institutions were merely trying to follow the already set anti-fraud measures. However, CADA is still investigating the matter and has yet to make a decision about the case.
Brazil has seen tremendous growth in the number of cryptocurrency exchanges across the country. Currently, cryptocurrency exchanges have more accounts than stock exchanges, which is causing authorities to move in and enact measures to protect its economy. Recently the Brazilian government sent questionnaires to local cryptocurrency exchanges in an attempt to get a better understanding of their businesses. In July, police in Brazil arrested 12 individuals accused of laundering millions through cryptocurrencies. The gang was suspected of laundering millions of dollars acquired from drug trafficking using cryptocurrencies.
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.
The post Brazil watchdog cracks down on banks restricting crypto exchanges appeared first on Coingeek.
The Administrative Council for Economic Defense, an official antitrust watchdog of the Brazilian government, has launched an investigation into the country’s banks, which were allegedly abusing their power to undermine domestic cryptocurrency exchanges.
On Wednesday, Reuters reported the investigation, which was opened on Sept. 18, will determine whether banks decision to restrict cryptocurrency brokers is harmful to the domestic crypto market. The Brazilian Association of Cryptocurrency and Blockchain (ABCB) requested the investigation back in June after Atlas Quantum, a bank in Brazil, closed accounts belonging to crypto companies.
The investigation will look into several banks in the country, including Banco do Brasil, Banco Bradesco, Itau Unibanco, and Banco Santander Brasil, according to the report.
Cryptocurrency exchanges filed to have the matter investigated to stop banks from closing their accounts without proper explanation. Exchanges hope that the investigation will help solve this issue and have their accounts opened or be given a way forward.
Reuters expect the investigation to cause another clash between the banks and crypto exchanges in the country. The banks are denying the allegations and claim that accounts belonging to the cryptocurrency brokers were closed because of missing client data, which they say are crucial in keeping the accounts open. The banks claimed they had to close the accounts to avoid backlash from the central bank.
CADE officials noted that the conduct by the bank was not unreasonable, saying that by applying such restrictions, the financial institutions were merely trying to follow the already set anti-fraud measures. However, CADA is still investigating the matter and has yet to make a decision about the case.
Brazil has seen tremendous growth in the number of cryptocurrency exchanges across the country. Currently, cryptocurrency exchanges have more accounts than stock exchanges, which is causing authorities to move in and enact measures to protect its economy. Recently the Brazilian government sent questionnaires to local cryptocurrency exchanges in an attempt to get a better understanding of their businesses. In July, police in Brazil arrested 12 individuals accused of laundering millions through cryptocurrencies. The gang was suspected of laundering millions of dollars acquired from drug trafficking using cryptocurrencies.
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.
The post Brazil watchdog cracks down on banks restricting crypto exchanges appeared first on Coingeek.
