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Brazil’s largest Bitcoin [BTC] exchange loses case to Itau Bank

Febin Jose



Brazil's largest Bitcoin [BTC] exchange loses case to Itau Bank
Source: Unsplash

In a landmark judgment, the Superior Court of Justice, the second top court of Brazil, said that banks have the authority to close cryptocurrency-related accounts without any justification.

The court vindicated its ruling by stating that the move is in compliance with the Brazilian banking regulations.

The ruling was given at the end of a lawsuit filed by Mercado Bitcoin, one of Brazil’s largest Bitcoin [BTC], against Itau Bank for closing their accounts abruptly. The verdict is viewed by lawyers as a benchmark for future lawsuits involving banks and exchanges.

Itau had supported their side by stating that anti-money laundering regulations and customer identification involved in the opening of new accounts gave them the necessary rights to close any bank account. They also quoted the National Monetary Council standards to strengthen their point.

If an account is found to be involved in or facilitating any illegal activity, it was up to the bank’s discretion to discontinue the account or not, even if the claims are not proved.

Mercado Bitcoin, in an attempt to win the case, claimed that such decisions were detrimental to free market and accused them of abusing the market powers in the country.

However, the court concurred that Itau was in the clear, unless the complainant could prove that the former is breaking any constitutional norm. The court also added that even if they did prove such a claim, they will then have to appeal to the Supreme Court directly.

In Brazil, Bitcoin and other cryptocurrencies are relatively free of regulations. The Central Bank and the Financial Activities Control Council (COAF) do not monitor the trade of tokens.

Though banks have a problem with this, according to experts, it is unlikely that they are in competition with cryptocurrencies. Pedro Henrique Pessanha Rocha, president of Brazilian Board of Lawyers on the Federal District (OAB-DF), said:

“Honestly, I do not believe banks are afraid of the competition of the exchanges, even because they operate in different areas … they are afraid of frail compliance control in the prevention of money laundering.”

As cryptocurrencies also fall under the ambit of the Money Laundering Law, the only way for cryptocurrency exchanges to live in the environment is by finding creative ways to gel with the law. Tiago Severo, executive secretary of the OAB-DF banking committee, commented on the matter recently. He said:

“The bank’s entire responsibility … we are in a context where several institutions are re-evaluating, reinforcing the criteria for preventing money laundering.”

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Febin Jose is a full-time journalist/editor at AMBCrypto. He believes that cryptocurrencies will navigate a volatile future and that Arsenal can still win a title. Lives around the "if it sounds like writing, I rewrite it" mantra.


Peter McCormack gets an updated letter from Craig Wright’s solicitors




Peter McCormack gets an updated letter from Craig Wright's solicitors
Source: Unsplash

Peter McCormack, the host of What Bitcoin Did, was one among the people sued by Craig Wright for “harassment and libel”. Wright’s legal attack began with Hodlonaut, a prominent Twitter personality and moved on to others in the crypto community. However, McCormack has received an update of the legal notice for this.

McCormack tweeted:

“The following is the latest letter from his solicitors of Craig Wright. Based on the copyright news yesterday, it is very clear their game plan. I have until Friday to make a decision. Not contesting this is an option but in no way will I read a statement in court as they want.”

The letter received stated:

“You did not acknowledge service, or serve any defence or admission, by Thursday’s deadline (16 May 2019). Our client is therefore entitled to apply under Part 12 of the CPR to request that an order for judgment in default be entered against you. In the event that he obatins such an order, our client will be entitled to apply to the court for (a) an assessment of the damages that you must pay to him, (b) an injunction, (c) an order permitting a statement to be read in open court.”

In addition, the letter also outlined that libel litigation would not be straightforward since McCormack does not have lawyers acting for him. Moreover, the letter added that “our client does not want you to be put under unnecessary pressure”.

McCormack replied to one of the comments:

“I might not contest it. Not sure I want to give him the satisfaction.”

Ran NeuNer, the host of CNBC’s Crypto Trader, commented:

“Bro, you came out guns blazing saying you would fight this until the end! You rallied all of Crypto twitter to get behind you in this. Now you considering not contesting it? Is this what they teach you in Bedford.🤣”

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