The court of Justice of the State of São Paulo has denied an appeal by a Spanish bank Santander’s in a case against Brazilian Cryptocurrency exchange firm, Mercado Bitcoin. The court not only rejected the appeal but also affirmed its previous ruling.
Santander was sued by the Brazilian crypto exchange Mercado Bitcoin earlier in 2018. The bank had allegedly closed the exchange’s account on the claims that they had concerns over the source of accounts funds and the nature of activities of the exchange.
According to the court, Santander had violated resolution No. 2,025-93 of Banco Central do Brazil, which states that a financial institution should clearly define a reason freezing or closing an account. Also, according to Bacen’s circular, “the notification of an intention to terminate a contract should contain an express reference to the exact motive.”
In the ruling, the court ordered the Santander bank to immediately release the funds: over one million Brazilian real was locked by the bank. On top of that, the bank was required to pay a fine monthly equivalent to one percent interest on the locked funds; this was approximately two hundred thousand Brazilian real.
This is not the first occurrence concerning banks closing the accounts of cryptocurrency exchange firms. Virtex, an online market that connects Bitcoin buyers to sellers, faced the same fate. In April 2017, the Royal Bank of Canada secretively informed the CEO, Mr. David that it would no longer offer its services to his company.
“They shut down our account without any reason…They just said we have the right to refuse service to whomever we wish,” said Mr. David.