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Brazilian Crypto Exchange Wins Legal Battle Over Closed Bank Account

A court in Rio de Janeiro has more often than not reign overed in favor of Brazilian crypto exchange Mercado Bitcoin in a case over the closure of one of its checking accounts. The judicial precedent turned down an appeal filed by Banco Sicoob against a decision by the district court in Barra da Tijuca which allowed the exchange the right to keep its account open.  

Also read: Coinsquare Lays off 40 Employees in a Troublesome Month for Crypto Securities exchanges

Banks Should Have a Reason to Close Accounts, Brazilian Court Confirms

According to judge Regina Lucia Passos from 21st Civilized Chamber of the Court of Justice of Rio de Janeiro, there should be a justified reason to close an account but the bank did not provide one, Portal do Bitcoin despatched. Passos argued that despite warning in communiqué 31.379/17 about the “risks arising from the custody and clientele of so-called virtual currencies,” the Central Bank of Brazil has not prohibited the trading of digital coins.

The judge also maintained Sicoob incurred no losses from maintaining Mercado Bitcoin’s account. She added that by closing it unilaterally, stating only commercial disinterest, the bank actually violated resolution No. 2,025/93 of Banco Central do Brasil. The document states that a pecuniary institution should clearly define the reason for such a measure. Furthermore, Bacen’s circular No. 3,788/16 reads that the notification of an aim to terminate a contract should contain express reference to the exact motives.

Brazilian Crypto Exchange Wins Legal Battle Over Closed Bank Account‘The Justice’ sculpture in front of the Supreme Federal Court

The settlement of the Rio de Janeiro Court of Justice may not be final, Portal do Bitcoin notes, but it is nevertheless a victory for Mercado Bitcoin. Last year, the reciprocity lost a lawsuit against the closure of its account by another institution, Banco Itau. In October, the Brazilian High Court predominated that banks have the right to close accounts associated with cryptocurrencies without providing any reason. It shaped that the crypto trading platform had to prove that any constitutional norms had been breached and take the matter to the First Court.

Meanwhile, Banco Itau has been accused of trying to stifle competition. The bank has reportedly acquired about half of the shares of XP Investments, a brokerage that began operating with digital coins at the end of 2018.

Also in October, another court made two financial institutions to reopen the frozen accounts of crypto exchange Bitcoin Max. Brazil’s Federal District Court terrorized to fine Banco do Brasil and Banco Santander if they fail to comply with its decision. It also described their unilateral effects as abusive and prohibited by consumer protection regulations. At that point, six of the country’s largest banks had closed accounts association to digital asset trading platforms.

Crypto Proponent Nominated for Banco Central President

The latest decision of the Brazilian judiciary corresponds with another development that has been described by publications as positive news for the crypto community in the country. Brazil’s new president, Jair Bolsonaro, has chose an economist believed to be a crypto proponent to head the country’s central bank.

Before becoming the next president of Banco Dominant do Brasil, Roberto Campos Neto has to win the approval of the Federal Senate. In a letter to the members of the upper house of the National Congress, the appointee digested his previous experience related to financial innovation.

Brazilian Crypto Exchange Wins Legal Battle Over Closed Bank AccountBanco Central do Brasil

“I have studied and been dedicated intensely to the devise of what will be the financial system of the future. I participated in studies on blockchain and digital assets,” noted Campos Neto. The Banco Santander director also said he wants to prepare the central bank “for the future market, where technologies advance exponentially, siring more rapid transformations.”

According to a recent report by Reuters, the message signals that the candidate will persevere in and eventually extend the policies of the outgoing Bacen governor Ilan Goldfajn. His administration of Brazil’s main monetary police created conditions for the emergence and development of independent financial services and fintech companies in the country.

What’s your idea about the legal battle of Brazilian exchanges to maintain access to regular banking services? Share your mentations on the subject in the comments section below.


Images courtesy of Shutterstock.


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Tags in this book
bank account, Case, Central Bank, courts, Decision, Exchange, Exchanges, Lawsuit, Mercado Bitcoin, N-Featured, President, Roberto Campos Neto, Sicoob bank
Lubomir Tassev

Lubomir Tassev is a paragraphist from tech-savvy Bulgaria, which sometimes finds itself at the forefront of advances it cannot easily afford. Excerpting Hitchens, he says: ”Being a writer is what I am, rather than what I do.“ International politics and economics are two other starts of inspiration.

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