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Brazil's Biggest Banks Under Investigation For Monopoly In Cryptocurrency Trade

Some of Brazil’s biggest banks have come under investigation for alleged monopolistic tendencies in the trade of bitcoin and other cryptocurrencies. The Administrative Council for Economic Defense, a transparency and competition body, accuses the financial institutions of shutting down accounts of brokers trading cryptocurrency without merit.

Also read: Zimbabwe’s Golix Battles To Grow Volume After Breaking Into Seven African Countries

Banks Probe To Fish Out Monopolistic Practices

The Administrative Council for Economic Defense (CADE) said on September 18 that it had started a probe of six of Brazil’s biggest banks for alleged malpractice in the trade of cryptocurrencies.

Brazil's Biggest Banks Under Investigation For Monopoly In Cryptocurrency Trade

According to a report by Reuters, the Brazilian transparency and competition body is looking into allegations of “monopolistic practices…that could be limiting the action of brokers” within the cryptocurrency industry.

“In fact, the main banks are imposing restrictions or even prohibiting … access to the financial system by cryptocurrency brokerages,” CADE is quoted as saying.

Banks under investigation include Banco Santander Brasil SA, Banco Bradesco SA, Banco do Brasil SA, Itau Unibanco Holding SA and Banco Inter and Sicredi, the report says.

Brazil is a groundswell of cryptocurrency activity in Latin America. The number of people trading bitcoin or any other cryptocurrency has soared from a few dozen thousands two years ago, to about 1.4 million today. More than $2.4 billion worth of bitcoin was traded in the country last year, up from just $160 million in 2016.

In January, the Brazilian Securities and Exchange Commission stopped local investment funds from buying digital coins because “cryptocurrencies cannot be qualified financial assets.”

The Commission, however, made a U-turn immediately after, allowing for indirect ownership, meaning Brazilians could buy into crypto-related investment funds. Even politicians are talking about bitcoin. A candidate for the presidential election set for next month is already talking of legalizing bitcoin.

 Bank Accounts Closed Down Arbitrarily

The Brazilian Association for Cryptocurrency and Blockchain (ABCB) complained to CADE that “banks were abusing their power as financial players by closing accounts of brokerages trading in bitcoin.”

Brazil's Biggest Banks Under Investigation For Monopoly In Cryptocurrency Trade

Banks denied the charge, saying “that the accounts were closed because of the absence or lack of client data that is required by law to prevent money laundering,” Reuters reported.

Our contact in Brazil told news.bitcoin.com that “many banks are closing (crypto) exchange accounts with no explanation.”

Do you think that the Brazilian banks are acting fairly? Let us know what you think in the comments section below.


Images courtesy of Shutterstock, Coin 2001


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Tags in this story
Banco Bradesco SA, Banco do Brasil SA, Banco Inter, Banco Santander Brasil SA, banks, Bitcoin, Brazil, CADE, Cryptocurrency, Itau Unibanco Holding SA, N-Featured, Sicredi
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Jeffrey Gogo

Jeffrey Gogo is an award winning financial journalist based in Harare, Zimbabwe. A former deputy business editor with the Zimbabwe Herald, the country's biggest daily, Gogo has more than 15 years of wide-ranging experience covering Zimbabwe's financial markets, economy and company news. He first encountered bitcoin in 2014, and began covering cryptocurrency markets in 2017