Chile's Free Competition Defense Court (TDLC) has issued a landmark ruling ordering Banco Itaú and BancoEstado to keep the checking accounts of Latin American cryptocurrency exchange Buda open, rejecting the banks' attempts to close them. The decision stems from a legal battle that began in 2018 when both banks unilaterally shut down Buda's accounts amid an investigation into a Ponzi scheme involving a fraudulent company called Terra Finance, which had no connection to the exchange.
Court Rejects Banks' Claims
According to Diario Financiero, the TDLC determined that the banks had failed to provide sufficient evidence to justify the account closures. Banco Itaú had argued that Buda indirectly allowed other high-risk crypto exchanges to use its banking infrastructure. However, the court dismissed this reasoning, stating in its resolution:
“The new information presented does not undermine the serious presumption of the right that is claimed or of the facts denounced in the lawsuit.”Four victims of the Terra Finance scam, who claimed to be Buda users, had lost approximately 100 million Chilean pesos (around $200,000). The banks used this as a pretext for closing Buda's accounts, but the court found no direct link between Buda and the fraudulent activities.
Legal Battle Continues
Samuel Cañas, Buda's chief legal officer, commented: “The bank has not been able to present sufficient information to dismiss the serious presumption of acts that threaten free competition that the Court determined to grant the precautionary measure in favor of Buda.com.” Buda's CEO Guillermo Torrealba acknowledged that the legal fight is far from over, with lawyers estimating another year of proceedings. However, he noted progress: “Four of five judges voted in favor of Buda this time, compared to three votes in the last audience. We are on the right path.”
This ruling sets a precedent for crypto exchanges in Chile and beyond, signaling that courts may push back against discriminatory banking practices. As the regulatory landscape evolves, such decisions could foster greater financial inclusion for digital asset businesses.