Bitcoin

Brazilian Banks Freeze Accounts of Bitcoin Exchanges

Have Brazilian banks blocked the accounts of Bitcoin exchanges?

Various stock exchanges have been accusing South American financial institutions of this for some time. According to this, the banks have frozen or restricted accounts on exchanges for cryptocurrencies for no apparent reason since 2015. The payment institutions, on the other hand, claim that the reason was the lack of transparency of the Exchanges in the commercial registers. In addition, many trading exchanges did not clearly inform the banks of their business when they opened their accounts. The conflict between banks and the Bitcoin ecosystem is entering the next round.

Anyone opening an account in Brazil must clearly inform the bank of the purpose for which they need it – this is common practice there. Here, banks have apparently identified gaps in the opening of accounts by various exchanges. The result was the repeated blocking of accounts, about which the crypto exchanges again expressed themselves loudly – so loudly that the Brazilian economic institute CADE (Administrative Council for Economic Defense) now sees itself forced to roll up the processes.

Anyone opening an account in Brazil must clearly inform the bank of the purpose for which they need it – this is common practice there. Here, banks have apparently identified gaps in the opening of accounts by various exchanges. The result was the repeated blocking of accounts, about which the crypto exchanges again expressed themselves loudly – so loudly that the Brazilian economic institute CADE (Administrative Council for Economic Defense) now sees itself forced to roll up the processes.

Both sides have a duty to provide explanations

In the past, banks have had to declare themselves responsible for blocking accounts. Now it is the turn of the crypto exchanges. The government institute has sent them a comprehensive list of questions. Failure to answer would result in a fine of up to 25,000 US dollars.

In addition to the general description of the transactions, the questionnaire also includes the possible economic damage that the Bitcoin exchanges have suffered as a result of the account closures. It does not yet seem clear what position the government will take on the allegations. As in many parts of the world, the legal and banking system appears to be in the discovery phase and not yet to know exactly what place digital currencies and trading in them will take in the legal system.

Banks and the Bitcoin world – a love-hate relationship?

You don’t really know how to reconcile the banks and the crypto world. Bitcoin and Blockchain, as an alternative to the banks, are now promoted by the banks and more and more blockchain applications are being implemented in the banking system itself. Bitcoin traditionalists and cipher punks would have good reason to regard this as support from the wrong side.

On the other hand, there is also strong resistance, as is now the case in Brazil. Of course, every country, every legal system and every financial institution must be considered separately. A simplification to “the banks” and “the crypto world” would not do justice to this complex matter.

Nevertheless, it can often be observed that banks are particularly opposed to an unregulated Bitcoin world – but if it adheres to the old rules of the game, there seem to be many connecting factors to the traditional banking world.

About the author

Beryl Jones

Beryl Jones

Beryl is a journalism graduate with keen interest in technology. Beryl has been attracted to Bitcoin and other digital currencies from 2009 while she was still pursuing her graduation. She loves writing articles and covering news on cryptography, digital currencies and related subjects.

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