Brazilian Banks Could Soon Cut Off Banking Support for Local Crypto Exxhanges

Two large commercial banks in Brazil, Itaú and Banco Bradesco, have started refusing to abide by an agreement preventing them from closing the accounts of local cryptocurrency exchanges.

According to Hispanic crypto news outlet Criptonotícias,  Banco Bradesco, one of Brazil’s largest commercial banks, was the first to refuse to abide by an agreement that prevented the financial institution from cutting off local cryptocurrency exchanges.

Brazil’s Administrative Council for Economic Defense (CADE) ruled, in December 2019, that banks were somewhat justified in shutting down the accounts of local cryptocurrency exchanges. The financial institutions argued there is no strict know-your-customer (KYC) compliance among exchanges, which means there are money laundering risks.

In its decision, CADE wrote:

There is rationality in banks' decisions to close or refuse to open accounts [for cryptocurrency exchanges], and this rationality is not conditioned on any motivation for such attitude.

As a result, CADE ruled banks could shut down the accounts of local cryptocurrency exchanges as there was no evidence pointing to the move being antitrust crimes. In response to the ruling, the Brazilian Association for Cryptocurrency and Blockchain (ABCB) filed an appeal with 14 arguments against the decision. Among these there were allegations of “obscurity,” “omissions,” and “contradictions.”

Banco Bradesco now reiterated that cryptocurrencies pose money laundering risks, and is as such choosing not to abide by any demands from the ABCB regarding cryptocurrency exchange accounts, and attacking the organization’s appeal. Banco Itaú, another major Brazilian bank, is also arguing against the appeal.

Cryptocurrency exchanges in Brazil have been fighting commercial banks for years now, with the battle seemingly having no end in sight. Despite the banks’ attitudes Brazilian people appear to be pro-crypto, as the city of Fortaleza, capital of the state of Ceará, has announced it’ll be selling transport tickets for BTC.

Last year, Brazil’s central bank adopted guidelines from the International Monetary Fund (IMF) and started officially recognizing cryptocurrencies like bitcoin as assets.

Featured image via Unsplash.

Binance Raises Eyebrows After Confirming Coinmarketcap Acquisition

Binance Holdings Ltd., the firm behind leading cryptocurrency exchange Binance, has confirmed the acquisition of cryptoasset tracking platform CoinMarketCap.

In a blog post, Binance confirmed the acquisition and claimed CoinMaketCap “stays committed” to providing quality cryptocurrency data to its users “while benefiting from Binance’s expertise, resources and scale.” It added CoinMarketCap has “maintained independence from external stakeholders since its inception” and will keep being an independent business entity.

In the post, Binance CEO Changpeng Zhao was quoted as saying CoinMarketCap is the “landing page of crypto.” The acquisition was first reported on by TheBlock, which wrote the platform could be changing hands for as much as $400 million in cash and stock.

While Binance’s BNB token and the Binance exchange are listed on the platform, the post responded to users’ concerns surrounding the acquisition writing:

CoinMarketCap and Binance are separate entities that maintain a strict policy of independence from one another: Binance has no bearing on CoinMarketCap rankings, while CoinMarketCap has no influence over Binance’s operations.

As CryptoGlobe reported, users expressed concern surrounding CoinMarketCap’s data after the acquisition was first reported, as managing the platform could be very beneficial for Binance, which could use it as a funnel to gain new users.

Speaking to Bloomberg News Nic Carter, co-founder of Coin Metrics, noted that Binance could also set its platform as the preferred exchange by topping the rankings by default.  Carter added:

While the move may cause some to question CMC’s [CoinMarketCap’s] ability to remain a neutral data provider, it could potentially be very productive for Binance.

Binance’s blog post details CoinMarketCap’s founder Brandon Chez is stepping down as CEO to focus on his family, while current Chief Strategy Officer Carylyne Chain has been named interim CEO.

The cryptocurrency exchange recently raised users’ ire after participating in what was dubbed a hostile takeover of the STEEM blockchain, later on removing the vote. CoinMarketCap’s data itself has also been heavily criticized, with one filing with the Securities and Exchange Commission from Bitwise Asset Management arguing 95% of the trading volume it reports is fake or non-economical in nature.

Cryptocurrency exchanges have been known to use schemes that help boost their trading volumes – in some cases allegedly going as far as wash trading – to boost their rankings on CoinMarketCap and gain visibility.

Addressing the issue Zhao noted it wasn’t an easy problem to fix, adding that almost everything “requires some kind of judgement or algorithm.” While the acquisition comes at a time in which the economy has been suffering because of the COVID-19 outbreak.

Market volatility has, however, been good for crypto exchanges. Zhao revealed Binance’s traffic increased about five times over the past few weeks, while Coinbase had already revealed its volumes grew after the March 12-13 market crash.

Featured image by David McBee from Pexels