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Brazilian cryptocurrency union asks Cade to ban banks from closing accounts

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Brazilian cryptocurrency union asks Cade to ban banks from closing accounts

The Brazilian Association of Cryptocurrencies and Blockchain, the ABCB, will meet with the board of Cade, the country's antitrust watchdog, to call for a ban on the closure of bank accounts belonging to companies operating with virtual currencies, Valor Econômico reported.

During the meeting, to take place on Aug. 15, ABCB will present its case, claiming that Brazilian banks commit unfair competition practices when they shutter accounts of cryptocurrency traders.

The request stems from a case in May 2018 where Banco do Brasil SA closed a bank account of startup company Atlas, which operates with bitcoin. The industry association is reportedly also arguing that the state-run should be slapped with a fine that could amount to between 0.1% to 20% of the gross turnover of the cryptocurrency company involved in the case.

Coincidentally, Fernando Furlan, the head of ABCB, is the former head of Cade.

Meanwhile, Banco do Brasil has reportedly argued that it did not mean to punish the use of virtual currencies when it closed the accounts in question and that the decision did not in itself harm the finances of the company involved. The state-run bank also said that it had no official mechanism to detect cryptocurrencies in accounts, according to Valor Econômico.

Instead, Banco do Brasil says it merely adhered to rules of the termination of a business relationship, after the bank decided the client was engaged in incompatible financial transactions.

"Regarding the prevention and the combat against money laundering and terrorist financing, the bank adopts restrictive business measures when the financial transaction is incompatible with the information declared to the bank and may indicate the practice of financial and exchange related irregularities," Banco do Brasil reportedly told Cade.

Meanwhile, Chile has also seen a string of lawsuits in recent months, where cryptocurrency firms are suing major Chilean banks for closing their bank accounts, amid a broader dispute with the financial sector over the legality and regulatory framework for such traders.

Courts in Chile have ordered Banco del Estado de Chile to reopen the account of cryptocurrency trader Orionx, ruling the closure of the account had constituted an "arbitrary and illegal action."

Chile's finance ministry, meanwhile, is studying potential regulations for cryptocurrencies amid the dispute between traders and banks.