Chile's Supreme Court recently rejected cryptocurrency exchange Orionx's appeal, meaning the company's account with state-owned bank BancoEstado will not be reopened.
Back in March, BancoEstado notified Orionx that it would soon close the exchange's account. The company responded by filing an appeal, along with the exchanges Buda and CryptoMKT, in April. Santiago's Court of Appeals, which heard the case in July, judged the bank's action to be "arbitrary and illegal," therefore infringing upon a constitutional right to legal equality before the law. The court, as a result, decided Orionx's account should be reinstated.
The Supreme Court, however, did not agree with the lower court's decision. Chile's highest court noted that BancoEstado's closure of Orionx's account was neither arbitrary nor illegal. The ruling added that because cryptocurrencies such as Ether, Ripple, and Litecoin are not physically manifested, they do not possess intrinsic value, and they are not backed by any government, the bank could not fully know about Orionx's financial activities, limiting the bank's ability to ensure compliance.
The ruling concluded, "[I]t 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 court also maintains that it wants to prevent the possible exploitation of BancoEstado, as cryptocurrency has been linked to money laundering and terrorist financing, among other shady activities.
Although Orionx's account will remain closed, Guillermo Torrealba, co-founder and CEO of the crypto exchange Buda, reassured the community via Twitter that the Supreme Court's ruling only affects Orionx, not his company. The cases are separate.
Translations by Google.