In what could become a precedent for the future, Brazil’s Superior Court of Justice has affirmed banks have the power to close accounts - without any sort of justification - that are used by cryptocurrency exchanges.
According to local news outlet Portal do Bitcoin, the decision by the Court came in a case between Itau Bank and the Mercado Bitcoin exchange.
Even though the decision by the Court was based only on the facts of the case, some experts speculate the decision could be a precedent for similar cases down the road.
In August, Natalia Garcia of Foxbit pointed out how important it was for cryptocurrency exchanges to have access to bank accounts. At the time, she said “an unfavorable decision can end the industry. "
Passionate Arguments From Both Sides
Both sides in the case were passionate with their arguments. Those supporting the exchange made points about how closing the account was an abuse of rights since it was an “essential infrastructure” for commercial operations.
However, the exchange maintained the law was on their side. They also noted how they reserve the right to close accounts.
Portal do Bitcoin reported in August that the case between the bank and exchange had been pending since 2015. It also suggested some other exchanges were experiencing issues with bank accounts.
A Burgeoning Cryptocurrency Industry
Cryptocurrency enthusiasm has been heating up in Brazil, and some of the nation’s financial leaders have been taking note.
In late September, the CEO of Group XP said the company was going to launch a Bitcoin and Ethereum trading exchange.
Even though CEO Guilherme Benchimol is not the most passionate fan of cryptocurrency, he said the firm “felt obligated to start advancing in this market.”
Brazilian regulators have also seemingly been easing up on the technology over the last few months, whileauthorities published rules earlier this yearthat laid out how funds could make investments in crypto-assets that were overseas.