Banks in Chile, South America’s wealthiest economy, have implemented a blanket ban on cryptocurrencies by closing accounts held by trading platforms. The trading platforms Buda, Orionx and CryptoMarket had their bank accounts by three major banks: Itau Corpbanca, Bank of Nova Scotia and state-owned Banco del Estado de Chile. No explanation was given for the closures. An appeals court has agreed to hear complaints from the trading companies but the bank accounts remain closed.

Small but growing

Chile’s cryptocurrency market is small but growing, and Buda is the largest platform. Buda is self-regulated, and states it complies with international financial standards. The platform is half the size of the largest global platforms, and traded about $1 million per day before the bank accounts were closed. Local media reports have speculated that the orders to shut the accounts may been a government decision.

Risk warning

Irrespective of whether the closures are at the request of the government, they follow policies seen in China and South Korea, which have outright banned cryptocurrency trading and initial coin offerings. Chile’s Financial Stability Council, which has representatives from the main regulatory bodies, issued a warning about cryptocurrency investment risks in a statement published on April 5.