A crypto exchange platform, Orionx, based in Chile has recently faced a ruling against it from the highest court in the country that is Supreme court. The court has rejected Orionx’s appeal, ruling in favor of state-owned bank BancoEstado.
In March, Orionx received a notification from the bank BancoEstado saying that it would soon close the exchange’s account. Following the notification, the company filed an appeal, along with the exchanges Buda and CryptoMKT. Santiago’s Court of Appeals gave a ruling that had guaranteed protection to Orionx and forced local state-owned bank BancoEstado to reopen its account.
However, the supreme court of Chile didn’t concur with the lower court’s decision. The supreme court claimed that BancoEstado’s process with Orionx’s account was neither arbitrary nor illegal. The ruling states that cryptocurrencies “have no physical manifestation and no intrinsic value,” and also that any government does not control them. This nature of cryptocurrencies prevents banks from receiving detailed information on transactions, due to that banks refuse services to the exchange, according to the ruling.
As given in the ruling by the supreme court, “It is precisely this impossibility of knowledge and of fulfilling the duties that weigh on the bank, which gives support to the decision to close the bank account of the plaintiff [Orionx].”
The supreme court also addressed the issues of money laundering and terrorism financing, questioning the use of crypto assets in such illicit activities.
Although, it remains unclear if the if the court’s decision is also applicable to other two crypto exchanges: Buda and CryptoMKT. On this, Guillermo Torrealba, co-founder, and CEO of the crypto exchange Buda declared via Twitter that the Supreme Court’s ruling only affects Orionx, not his company. The cases are separate.
Moreover, in May, Mario Marcel, the president of the Central Bank of Chile affirmed that the institution was considering designing a regulatory framework for cryptocurrencies. The framework is expected to deal with the risks associated with crypto trading.
Reportedly in In October, Chilean MPs declared a resolution on blockchain adoption which did not focus on cryptocurrencies. Chile has been an active region for the development in crypto market.