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A crypto exchange based in Chile has lost a court battle in an ongoing legal war against a state-owned bank, as reported by CoinTelegraph. OrionX appealed to the Supreme Court after its account was suspended by Banco del Estado.
This ongoing case could prove to set a significant precedent in terms of regulation of crypto exchanges, certainly in Chile if not further afield.
OrionX, along with fellow Chilean trading platforms BUDA and CryptoMarket (CryptoMKT), jointly appealed in April after having their accounts shut down by Banco del Estado as well as the private institution Itau Corpbanca.
The court initially ruled that Banco del Estado had acted wrongly, offering protection to OrionX and forcing its account to be re-opened. This most recent decision is a direct revocation of that ruling, declaring that the bank was justified in its actions.
The anonymous and decentralized nature of cryptocurrencies is, as usual, the key motivation for the court's ruling. It claims that cryptos "have no physical manifestation and no intrinsic value", and points out that exchanges have no information about who they are doing business with. The potential for terrorism funding and money laundering is another factor that has led the court to decide that Banco del Estado was correct to close OrionX's account.
It is so far unclear how this ruling will apply to other litigants involved in the case.
Read more: Only 39% of Chileans have heard of cryptocurrency, according to new study