The squabbles between banks and crypto exchanges in Chile have continued to escalate over the last few weeks. A number of exchanges have had their accounts closed by banks suddenly with no warning and they are attempting to fight back. This is proving to be difficult as even state-backed banks have closed accounts, showing the government may have a hand in the closures.
Exchanges like Buda and Crypto MKT have struggled to stay afloat since the closures of their accounts. They have taken the closures to an appeals court but the case remains locked up there and their accounts remain closed. The founders of the exchanges have spoken out against these closures, saying it will set cryptos back 5 years if accounts are not reinstated. They argue that there is self regulation in place for many of the exchanges and the closed accounts was unwarranted. Banks have stated they don’t believe the proper regulation is in place for cryptos and that is what caused the closure.
The exchanges challenged the Chilean Association of Banks (ABIF) in order to get a ruling of why this occurred before taking legal action. The ABIF responded saying all of the closures were on a case by case basis but cryptos were not specifically targeted. The crypto exchanges saw through that and saw the only route to accounts being reinstated was through the court.
While the cryptocurrency scene in Chile is nowhere near the size of of other countries, this could be showing a dangerous trend in South America. The closure of accounts has happened before but the lack of notice or transparency with the exchanges sparks a lot of uncertainty. Investors in other countries are starting to become worried about how this will ripple across the country and impact them.