The Supreme Court of Justice of Chile validated the closure of the bank account that the Orionx cryptocurrency exchange kept at BancoEstado. The third chamber of the country's highest court rejected an appeal filed by Orionx against the financial institution, for the cancellation of one of its accounts, and revoked the previous ruling of the Court of Appeals of Santiago that considered the closure as arbitrary, according to reports of local media.
With the decision, the Supreme Court defended the position of the state bank by saying that "the sentence appealed on July 11 of two thousand and eighteen is revoked and in its place it is declared that the appeal of protection deduced by Orionx SPA against the Bank is rejected. of the State of Chile, "newspaper El Mercurio reported in its digital portal .
The court explains that BancoEstado did not resort to an arbitrary or illegal act when it closed the account and on the contrary it minimized the technology behind the cryptoactives by stating "that they lack physical manifestations and have no intrinsic value". The court added the following on this point:
The transfer of the plaintiff (Orionx) includes the purchase and sale of virtual currencies and cryptocurrencies such as Ethereum, Ripple, Litecoin and Bitcoin, all consistent -according to the resource itself- in computer programs, specifically algorithms that, as such, lack of physical manifestations and have no intrinsic value as well as -generally- one that has the backing of a particular government or of a company, being defined and controlled by a decentralized group of users who use the Bitcoin protocol on the internetSupreme Court
The main argument of the court to validate the closing of the account has to do with the fact that in Chile there is no "regulatory recognition of the activity ". In addition, it seeks to prevent the bank or its financial services from being used to launder money or finance "risky activities".
However, the decision of the Supreme Court was not unanimous, Minister Angela Vivanco voted in favor of the ruling of the Court of Appeals, that is, her opinion favored the Chilean startup .
CriptoNoticias contacted Joel Vainstein, a co-founder of Orionx, who assured that the Court's decision "does not have any operational implications, and that the accounts will not close us" . The executive explained to this newspaper, through an email, that although he regrets the adverse ruling, he does not share the arguments that led the authority to make this decision.
The company said through another statement that it sent CriptoNoticias the following:
OrionX wants to clarify that this failure does not imply the closing of the current bank accounts of the company. This is because there is a current precautionary measure decreed by the Court for the Defense of Free Competition, which prevents banks from closing the aforementioned accounts.OrionX
After announcing the news, Guillermo Torrealba, co-founder and CEO of Buda, said on twitter that the sentence does not involve Buddha because the company continues its legal process in another instance. "For those who ask, the Supreme Court only endorsed the closing of accounts in the context of a protection remedy presented by UNA empresa no @BudaPuntoCom). Buddha sued the banks before the Free Competition Tribunal, which is another instance, with other arguments. Another case"
Another Chilean exchange house, this time CryptoMKT, was also contacted by CriptoNoticias to know if the court's decision would affect its operations. Martin Jofré, co-founder of CryptoMarket, said: "Today, the Supreme Court rejected the protection appeal of a cryptocurrency company that was litigating against BancoEstado. What the court decided only affects the company in particular and does not affect in any way the operations or the judicial strategy of CryptoMarket in TDLC  Free Defense Court Competition) ".
A legal appeal introduced in July of this year in the Santiago Court of Appeals ruled in favor of Orionx and ordered BancoEstado to reopen the startup's account . The fourth room considered at that time that the closure had been "arbitrary".
The shocks between the banks and the cryptocurrency exchange houses in Chile have a history that includes judicial disputes in different courts. In March of this year the companies CryptoMKT and Buda were notified of the closing of some of their bank accounts .
At that time, Chilean banks supported the suspension of accounts, receiving a boost from the Association of Banks and Financial Institutions of Chile . In the middle of the situation, the exchange houses continued legal actions against ScotiaBank and Itaú to try to recover their accounts.
In our editorial on April 8, 2018, entitled "Who wins before the closing of bank accounts of the cryptocurrency exchange houses in Chile? An analysis is made on this panorama, its causes and consequences in the country.
The decision of the Supreme Court sends a message to the companies that make life in the ecosystem. Because it is the highest judicial authority in the country, a ceiling is established with respect to companies that want to develop within this segment of the digital economy, at least until Chile establishes a regulatory framework to establish its own rules of the game .