The accounts of cryptocurrency exchange, Buda, has been shut down by some Colombian banks. This is not the first time it has happened to the exchange. In April, the Chilean Supreme Court ordered the banks (Banco del Estado de Chile and Itau Corpbanca) to reopen the accounts while the case was being heard. That lawsuit is currently ongoing as Buda, and other exchanges, are taking on a number of banks for unjustified closures.
Buda is one of the more highly regarded exchanges in South America and operates in several countries. This means that the rulings are doubly important, as they will set a precedent in what is a new industry. Buda was not given any prior warning of closure. When Buda tried to contact Bancolombia, they were merely told that their accounts had been closed without offering any real explanation. This resulted in a delay of withdrawals, though Buda has said they will soon be fully operational. Buda has also reassured its users that funds are safe.
Bancolombia is not the only bank to have closed the accounts. As in Chile, banks seemed to have worked in tandem without prior warning to shut down cryptocurrency exchange accounts at the same time. The other two banks that closed the accounts include Davivienda and BBVA. According to Cripto 247, the actions occurred after an internal letter from the financial control officer, which indicated that banks are not authorized to interact with cryptocurrency platforms. However, this letter was issued in February and seems to be advisory as opposed to compulsory.
The account closures come amid positive news in the Colombian cryptocurrency sector. On the same day that the accounts were closed, the Colombian senate had a debate on the blockchain industry. Senator Navarro Wolf claimed that blockchain technology would change the lives of citizens and proposed that the technology is used in the electoral process of the country to promote transparency.
While the accounts were reopened in Chile in the anti-monopoly suit, this may not be the case in Colombia. In India, the supreme court has refused to order banks and payment processors to continue doing business with cryptocurrency companies while the case is being heard, a move that could quickly bankrupt the exchanges in the meantime.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.