All over the world the courts are raising to defend the crypto

There is a steady tendency in the crypto: banks are freezing or banning accounts of any clients, as soon as they have a slightest suspicion that money on the account have come from crypto related operations.

Bithumb, one of the most significant South Korean crypto exchanges, can’t open new virtual accounts for their clients any more. The reason for this is simple - Bithumb does not meet the renewed KYC (So-called Know-your-client) regulations in the country any longer and because of this - the bank, that used to work with them, suspended their contract, with a month-long grace period. This is a pure technicality since Bithumb met the previous regulation.

In most cases this is a primary problem, banks look up for the slightest reasons to put crypto exchange accounts under the non-conformity with AML and KYC and then ban them.

Furthermore, according to Changpeng Zhao, executive director of Binance, this is one of the main reasons why Tether couldn’t perform a proper audit. Officially they stopped their business relationship with Friedman LLP because the company had failed to meet Tether’s time limits. But in  Zhao’s opinion, they were just playing it safe. If Tether had disclosed their account details - the bank could have banned their account, because it was clear where the money had come from.

The situation is grim, but not hopeless. Winds of changes are blowing from the Latin America, where big governmental banks are starting to ban crypto exchanges’ accounts. But Chilean cryptoexchanges were not ready to give up and went to Chile’s Tribunal for the Defense of Free Competition. The result surprised everyone - the panel of judges rallied to defense of Cryptomkt и Buda.com.

Another Chilean cryptoexchange, Orionx, was not as lucky as others and had to step it up, they went to the fourth Chamber of the Court of Appeals of Santiago, without having high hopes. And the outcome was also positive

If in previous cases victory in the courts of law was achieved by big and medium-sized companies, it is different in Brazil, where success was achieved by a small exchange called Walltime. Just like in the previous cases, Caixa Economica state-owned bank, blocked their account. After listening to both sides, the panel of judges rallied to Walltime’s defense. However, both parties are still waiting for the court’s final verdict on the issue.

Similar tendencies are sweeping all over the world - in Zimbabwe, Golix, one of the most significant exchanges in the country, filed a suit against Reserve Bank of Zimbabwe and won. The reason of the lawsuit was simple - RBZ decided to ban Bitcoin basically. The exchange did not bear with that and went to the court and won.

And those are anything but isolated cases - within the first half of the year there were around 20 cases like this, all around the world. While back in 2017 they were outstanding, this year - that is a common practice.

To sun it up, we can conclude the following:

• Banks aggression towards cryptoexchanges is raising, as they see a possible rival. And they are trying to use proven methods to keep the status-quo.

• Modern exchanges are not going to bear with that and are increasingly using the existing legislation.

• This helps them to get rid of the “negative” image of the black market tool.

• Legal system is ready to be independent from prejudices while considering such cases and is increasingly taking the side of the new industry.