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Cryptomanced entity goes to Cade against banks

The request is based on a case in which Banco do Brasil closed the current account of Atlas.

Devdiscourse News Desk
Updated: 09-06-2018 00:02 IST
Cryptomanced entity goes to Cade against banks

"This is not acceptable from the competitive point of view," Furlan told Reuters. (Image Credit: Reuters)

The Brazilian Association of Cryptotomes and Blockchain (ABCB) has asked the Brazilian Council of Economic Defense (Cade) to ban banks from closing or refusing to open accounts of institutions linked to virtual currencies, competition.

The request is based on a case in which Banco do Brasil closed the current account of Atlas, a startup that seeks profitability by arbitrating with bitcoins, exploring price differences between the various brokerages operating with the most famous of the crypto-coins.

The document, which ABCB sent to the antitrust body, to which Reuters had access, says BB attributed the closure of the account to an administrative decision.

According to ABCB president Fernando Furlan, BB's decision is an abusive practice, since platforms for financial innovations such as fintechs and crypto-currency brokers need access to the traditional financial system to survive.

According to Furlan, himself a former chairman of Cade, as well as BB, other major banks in the country have unilaterally closed the accounts of companies crypto-coins or if refused to open them.

"This is not acceptable from the competitive point of view," Furlan told Reuters.

Although BBB's main target is ABCB, it requests that Cade prohibit BB or any other financial institution from terminating the account or refusing to open an account of any company or individual that complies with the legal requirements to do so.

In the case of the federal bank, however, the entity seeks a conviction for allegedly anticompetitive practice.

Wanted, BB said it has not yet been notified about the matter by Cade. "If notified, BB will provide clarifications to Cade." Already the entity that represents the country's banks, Febraban, said it will not speak on the matter.

The 14-page document cites cases abroad where government officials, in similar cases, have barred banks from curtailing access to crypto-entities to current accounts. Among them, it mentions a decision of Chile's Free Competition Court (TDLC), which in April forced Itaú Unibanco and BancoEstado to reopen the current accounts of the crypto-currency operator

The ABCB initiative comes just over two months after Cade opened an investigation to evaluate Itaú Unibanco, Bradesco, Santander Brasil, BB and Caixa Econômica Federal practices at the request of fintech Nubank, which accused them of acting to limit competition in the financial sector.

Unlike fintechs, financial service platforms that are authorized to operate and have recently been regulated by the Central Bank, crypto-currency companies are neither authorized nor prohibited.

Regulatory bodies such as the Central Bank and the Brazilian Securities and Exchange Commission (CVM) have monitored the movement of their peers in other countries before carrying out any regulation of the matter in Brazil.

Furlan said he intends to meet with representatives of the Central Bank and CVM in the second half of this year to hear their concerns about the crypto-coins, a market that already has more than 2 million investors in Brazil, according to figures from the brokerage firms that operate in this market.

At the same time, in recent months countries such as China and India have imposed severe bans on the use of virtual currencies and large global banks, including JP Morgan and Citi, have banned the purchase of digital coins from their credit cards.

Here, the BC president, Ilan Goldfajn, even called in December the financial pyramid bitcoin.

(With inputs from Reuters)

COUNTRY : Brazil