A court in Brazil’s state of São Paulo has recently ordered Banco Santander to return over $335,000 to a local cryptocurrency exchange, after it froze its account claiming its activities were incompatible with the bank’s policies.

According to local news outlet Criptomoedas Fácil, adjudicator Daniela Menegatti Milano dismissed an appeal made by Banco Santander on a case brought forth by local cryptocurrency exchange Mercado Bitcoin, which saw the bank freeze its account with 1.3 million reals in it.

Per the news outlet, Santander froze Mercado Bitcoin’s account without giving the crypto firm a proper explanation, and when asked claimed its activities didn’t align with the bank’s policies. Mercado Bitcoin pursued legal action.

The crypto exchange claimed the funds were improperly frozen and should either be returned or deposited on another account until the process was concluded. The court ruled in favor of Mercado Bitcoin.

In light of what's exposed, I find justifiable the formulated requests, condemning the defendant to refund RS $1.350.733, fixed by the practical table of the court, plus interest of 1% per month…. The defendant will support legal expenses set at 10% of the condemned value.

The bank questioned the decision, and in a second hearing it was ruled Santander’s actions saw it abuse its power “insofar as it is not liable to seize resources deposited in the accounts of its clients, due to fraudulent transactions carried out by third parties”

According to the report Mercado Bitcoin revealed allegedly fraudulent transactions were carried out by third parties through the bank to its platform, which saw Santander launch an internal investigation into the issue.

The bank’s investigation reportedly even included using “Google Street View to gauge the financial conditions of those involved.” Despite knowing who was behind the fraudulent transactions, Santander decided to block Mercado Bitcoins account, instead of going after the individuals themselves.

The court noted that a lack of regulations doesn’t mean cryptocurrency exchanges’ activities are illegal. It noted, however, crypto exchanges aren’t currently able to properly monitor their platforms to ensure their users don’t break the law.

Brazil is notably a country in which the cryptocurrency scene has been growing. Last year it launched a national blockchain association, and this year its Ministry of Justice revealed it’s “studying” bitcoin over its potential use in crime.

Brazil’s President, Jair Bolsonaro, has back in January shut down a project that was looking to launch a cryptocurrency for its indigenous population.