Chile's Free Competition Defense Court (TDLC) has ruled in favor of the Latin American cryptocurrency exchange Buda, ordering two major banks — Banco Itaú and BancoEstado — to keep Buda's checking accounts open, rejecting the banks' petitions to close them amid a lawsuit linked to a Ponzi scheme unrelated to the exchange.
Background: Banks Closed Accounts During Ponzi Scheme Investigation
According to local financial newspaper Diario Financiero, the dispute dates back to 2018. A bogus company named Terra Finance turned out to be a scam, and four victims filed a lawsuit alleging they were defrauded of approximately 100 million Chilean pesos (about $200,000). The plaintiffs claimed they were users of the Buda platform. In response, Banco Itaú closed Buda's bank accounts, arguing that Buda "indirectly allowed the use of Itaú's systems by other cryptocurrency exchanges, of recognized risk, without being able to do anything about it." BancoEstado followed suit shortly after.
The banks argued that by providing services to Terra Finance, Buda facilitated the fraudulent scheme. However, Buda maintained that it had no knowledge of or involvement in the scam, and that the account closures were an overreach that harmed fair competition in the financial market.
Court Ruling: Banks Failed to Provide Sufficient Evidence
The TDLC examined the case and concluded that the banks' claims were not strong enough to justify the account closures. In its resolution, the court stated: "The new information presented does not undermine the serious presumption of the right that is claimed or of the facts denounced in the lawsuit." The court therefore granted a precautionary measure in favor of Buda, ordering the banks to keep the accounts open while the legal proceedings continue.
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." He emphasized that the temporary measure ensures Buda can continue operations with minimal disruption.
CEO: Legal Battle Continues but Momentum Shifts
Guillermo Torrealba, Buda's CEO, acknowledged that the legal fight is far from over. Lawyers have indicated that the case may take another year to reach a final resolution. However, he noted a positive trend: in this latest ruling, four out of five judges voted in favor of Buda, compared to only three in the previous hearing. "We are going on the right path," Torrealba said. He stressed that access to banking services is critical for cryptocurrency exchanges to operate legitimately, and this ruling sets an important precedent for the crypto industry in Chile and across Latin America.
Industry Implications: Crypto Exchanges' Banking Rights in Focus
The Chilean court's decision is not an isolated event. Globally, crypto exchanges have frequently faced sudden account closures by banks citing anti-money laundering concerns, compliance risks, or reputational damage. The TDLC ruling demonstrates that if banks cannot provide concrete evidence linking an exchange to illegal activities, courts may protect the exchange's right to fair access to banking services.
Analysts believe this ruling could encourage other Latin American jurisdictions to reassess their approach to crypto-related banking relationships, potentially leading to clearer regulatory frameworks. For Buda, the temporary retention of its accounts allows it to continue offering fiat on-ramp and off-ramp services to Chilean users, avoiding an operational crisis. The case also highlights the ongoing tension between the traditional banking sector and the growing crypto industry, as regulators worldwide grapple with balancing innovation and risk management.