Brazil Antitrust Regulator Revives Probe into Banks Ban on Crypto Firms

Brazil’s Administrative Council for Economic Defense (CADE) has voted to reopen its investigation into the closure of crypto exchanges’ accounts by the country’s banks. Some of the lenders under probe include Banco Santander Brasil SA, Banco Bradesco SA, Banco do Brasil SA, Itau Unibanco Holding SA and Banco Inter and Sicredi.

The antitrust and competition body started to investigate six of Brazil’s biggest banks in 2018 after they suspended accounts belonging to crypto firms without explanation and refused to discuss the decision. CADE took on the investigation following a complaint from cryptocurrency exchange Bitcoin Max that saw its bank accounts closed without explanation by Banco do Brasil and Banco Santander.

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During the initial investigation, whose results are not yet known, the CADE accused major banks of “imposing restrictions or even prohibiting access to the financial system by cryptocurrency brokerages.” The banks denied the charge and referred to concerns of illicit activities as reason for refusing access, saying crypto accounts were closed as a security measure to prevent money laundering.

Brazil is a hive of cryptocurrency activity

A ruling from Brazil’s Federal District Court ordered the reopening of cryptocurrency exchange Bitcoin Max’s bank accounts and promised to fine banks should they fail to comply with the judgement. Instead of denying banking services to crypto startups, says the court, banks must look into each case for its potential to engage in illicit activities.

Brazilians have not missed the cryptocurrency trend and the country has been a hive of activity related to crypto assets. Within Latin America, the nation was the cryptocurrency ringleader both on the regulatory side and on the development side. As it now stands, the country’s financial watchdog, the CVM, bans regulated investment funds from trading in the virtual asset class.

Brazil’s move towards cryptocurrency regulation took a step closer last year after the country’s parliament established a commission to consider the matter. Although their new president lacks basic knowledge about what Bitcoin actually is, still the country has been the biggest cryptocurrency hub in Latin America and generates the highest turnover in all the region.

Under the previous laws, crypto exchanges and other businesses serving as middlemen can provide the data on their clients voluntarily, but after the new legislation was introduced, they can’t refuse or appeal the authorities’ requests to turn over information.

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