Brazilian CADE to investigate claims that banks are harming cryptocurrency operations

Brazil’s antitrust watchdog, the Administrative Council for Economic Defense (CADE) is investigating a number of banks in relation to the claims that they are harming cryptocurrency exchanges in alleged monopolistic practices that restrict cryptocurrency exchange operations.

This is after the Brazilian Association for Cryptocurrency and Blockchain (ABCB) requested for the investigation back in June following the closure of bank accounts of Atlas Quantum. Atlas, which is seen by some as a Ponzi scheme, was hacked last month and data belonging to 264,000 users compromised.

Although ABCB filed a motion against Banco do Brasil -- one of the largest financial institutions in the country, it requested that the checks be widely applied at all other banks. ABCB director Fernando Furlan said that fintech and crypto-related startups need fair access to the financial system in order to survive and they cannot be arbitrarily blocked by larger financial institutions adding that it was unacceptable from a market competitive point of view.

The banks to be investigated include Banco do Brasil, Banco Bradesco, Itau Unibanco, Banco Santander Brasil, and more. These banks, according to CADE might be harming operations of cryptocurrency exchanges by "imposing restricting or even prohibiting… access to the financial system by cryptocurrency brokerages." This has caused commotion between banks and crypto exchanges including one involving Walltime cryptocurrency exchange against local bank Caixa Econômica Federal.

Another local bank Caixa Econômica Federal also had closed its account without notice or justification but the court ruled in late July in favor of the Walltime to let the exchange use funds on its account to keep serving its clients pending further court determination. The bank froze more than 800,000 reals ($212,000) in its account and Walltime wasn’t able to process customer deposits.

Lawyer for Walltime Graziela Brandão told a local news outlet after the court decision that the firm had already lost over the quarter of a million dollars and that a “probable future indemnity action” would help the firm to recover the money. Besides, the company had lost many users following the disruption in addition to realizing decreased trading volume.

Brazil’s central bank guidelines would have the bank inform the reasons for termination of the contract. The cryptocurrency exchange though had lost similar cases against some other banks that closed its accounts but they had issued prior notice.

Since late last year, reports indicate that the cryptocurrency industry in Brazil was growing at a faster rate with Forbes reporting in May that more people were opening cryptocurrency trading accounts than traditional brokerage accounts.

Brazil moved $2.4 billion in 2017 worth of Bitcoins compared to $160 million in 2016. Reportedly, there are around 3 million investor accounts in the country most held at four major exchanges including Foxbit, Mercado Bitcoin, Negocie Coins, and Bitcointoyou in addition to another 15 smaller exchanges in the country.

Further, Huobi exchange announced a move into the country and two football teams establishing partnerships to see them use the Inoovi cryptocurrency (IVI.)

David Kariuki

David Kariuki likes to regard himself as a freelance tech journalist who has written and writes widely about a variety of tech issues that affect our society daily, including cryptocurrencies (see and; climate change (, OpenSim and virtual reality (see He is currently pursuing a MSc in Environmental Management at Open University. He does write here not to offer any investment advise but with the intention of informing audience, and articles in here are of his own opinion. Anyone willing to use any opinion here as advise to invest in crypto should obviously take own responsibility and accountability of their losses (or benefits) thereof. You can reach me at [email protected] or [email protected]

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