Banco del Estado de Chile (Banco Estado), the only public bank supporting cryptocurrency, has decided to freeze accounts of the Chilean cryptocurrency exchanges Buda, Orionx, and CryptoMKT.
According to the El Mercurio, a local news outlet stated that the only bank in the South American nation of Chile that works with cryptocurrency exchanges has made a mind up to stop servicing their accounts.
Particularly, Banco del Estado de Chile working as Banco Estado is cutting ties with Buda, CryptoMKT, and Orionz.
The bank mentioned in the statement that,
“Banco Estado has decided not to interact with companies that issue or generate cryptocurrencies, that provide brokerage and intermediary services with cryptocurrencies, and do not serve as a platform for crypto exchange transactions.”
Banco Estado is the only public bank in the country, organizing all the financial activities of the government. Traditionally, it has focused on servicing small businesses and customers not involved in the other services of the bank. It is the top 3 largest bank in the country and usually positions as the secured bank in Latin America.
According to the coinmarketcap.com, Orionx offers Bitcoin trading with daily volume of $83,000. Hence, other two are not listed in the coinmarketcap. However, CryptoMKT transacts mainly with Ethereum and Buda offers Bitcoin trading.
El Mercurio reports that the bank has already decided to close the accounts of all three cryptocurrency exchanges. However, it has informed Orionx in a letter.
The letter said (roughly translated):
“We hereby inform you that BancoEstado has decided to close the account of which you are the owner, in accordance with the power provided in the Accounts Contract.”
The Orionx exchange reverted back to its “incorrect and anti-competitive” decision. It guaranteed users that their funds are fully back and that “there is no risk of bankruptcy”.
“We hope that before this process is finished, we will already have a new solution to continue operating Orionx.”
Another response by the CEO of BUDA, Pablo Chavez stated that if public bank confirmed with this step. The company will have to “move to a different format, the most extreme option would be to open a digital bank that allows operation”.
Co-founder of CryptoMKT, Martin Jofré stated that his startup had only some opportunities remaining. He also emphasized that he would return funds to its users when it hits.
Recently, CryptoMKT and Buda issued an open announcement to the Association of Banks and Financial Institutions (ABFI), introducing for fair rules. The exchanges ask watchdogs and regulators to confirm their position more clearly. Therefore, after the bank accounts of both exchanges were closed without warning.