Antitrust authority in Brazil to probe banks on crypto shut-out

September 19, 2018
Chris Wheal

Brazil’s competition authority has launched an investigation into alleged market abuses in the crypto-asset sector by the country’s largest banks, Reuters reported on Tuesday.

Antitrust watchdog Administrative Council for Economic Defence (CADE) said it was investigating four listed banks – Banco do Brasil, Banco Bradesco, Itau Unibanco and Santander Brasil – for allegedly using their market dominance to corner cryptocurrency trade.

Included in the probe were two unlisted banks, Banco Inter and Sicredi, the co-operative bank.

Market abuse accusations

Back in June, an investigation was called for by the Brazilian Association for Cryptocurrency and Blockchain (ABCB), which accused the banks of market abuse by closing the accounts of brokerages trading in bitcoin, while playing the same markets themselves.

CADE concluded in a report that presaged the investigation, that information it had seen indicated “the main banks are imposing restrictions, or even prohibiting access to the financial system by cryptocurrency brokerages”.

KCY and AML non-compliance blamed

In response, the banks have said that the only reason any crypto-dealer has had its account closed is for failing to comply with know-your-customer (KYC) protocols and other laws that are aimed to prevent financial fraud and money laundering.

Reuters said that following the probe announcement, Banco do Brasil, Latin America’s biggest bank by assets, said it was “committed to competitive practices based on ethics and respect for free competition”, while Itau Unibanco said it was “confident that its conduct will be considered legitimate”.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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