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

September 20, 2018 |

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 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” within the cryptocurrency industry “that could be limiting the action of brokers.”

“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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The post Brazil’s Biggest Banks Under Investigation For Monopoly In Cryptocurrency Trade appeared first on Bitcoin News.

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Cash to Crypto Trade Blooming in Moscow, Reports Say

September 12, 2018 |

Cash to Crypto Trade Blooming in Moscow, Reports Say

Buying cryptocurrency in Russia these days increasingly means parting with fiat cash, be it Russian rubles or American dollars. According to numbers quoted by local media, the 24-hour market turnover, just in Moscow, reaches a staggering $ 50 million dollars on peak days. Some say the cash-crypto trade resembles the wild-wild-east street forex of the 90s, while others claim that if it’s not prohibited then it’s allowed.      

Also read: Ukrainians Advised to Pay 19.5% Tax on Crypto Incomes

Multi-Million Cash Market for Crypto in the Capital

Last year’s skyrocketing prices have tremendously increased the popularity of cryptocurrencies around the world and Russia is no exception. The 2017 all-time highs drew a lot of attention and investment creating a multi-million dollar cryptocurrency market in Moscow which is still blooming. A big part of it involves cash transactions and as there are no dedicated regulations in the country yet, this type of crypto trading is neither legal nor illegal. According to estimates quoted by the local press, the daily crypto turnover in the capital alone is between $ 10 and $ 20 million USD but it sometimes peaks at $ 50 million.

Cash to Crypto Trade Blooming in Moscow, Reports SayA number of currency exchange shops and individual traders in Moscow are offering the service of fast and anonymous purchases and sales of cryptocurrency with rubles and dollars. An investigation by leading Russian business edition Vedomosti has found that the situation resembles that of the notorious 90s when forex deals were sealed right in the street. Now anyone can go to an office with a bag of cash, change it to crypto without identifying themselves or proving the origin of the funds. Isn’t it the same with fiat-to-fiat exchange?

According to Roman Zaguba, a representative of the UK-based crypto bank Wirex, most of these exchangers dwell on peer-to-peer platforms like Localbitcoins. Because of the lack of relevant laws, online trading platforms are also entirely outside of the legal field. The draft legislation that was voted on first reading in May and was supposed to be adopted in July has been delayed. The texts of the initial three bills have been synchronized and the revamped law “On digital financial assets” will be presented for public discussions in October before it’s reviewed again in the State Duma and hopefully adopted by the end of the year. Quoted by BFM, Zaguba added that the legal document contains definitions such as “exchange operators” and he believes the term applies to cryptocurrency exchanges that will be allowed to trade digital coins with fiat money.

A Third of the Turnover Comes From Chinese Merchants

Cash to Crypto Trade Blooming in Moscow, Reports SayIn its report, Vedomosti writes that cryptocurrencies like bitcoin core (BTC) and ethereum (ETH), currently with the largest market capitalization, are popular with Russian traders. Their circulation, exchange with fiat currencies and use in payments for goods and services are neither allowed nor officially banned. At the same time, the paper notes, they remain largely invisible for the central bank, the tax authority and the customs service. According to Aleksei Karpenko, senior partner at the law firm Forward Legal, Russian citizens have the right to buy cryptocurrency as property. This would only be illegal if the cash comes from proceeds obtained through criminal means. Laundering such money would be a crime, but the lawyer says this has nothing to do with cryptocurrency itself. “There is a common rule – if specific transactions are not prohibited, then they are allowed. This is a matter of agreement between a buyer and a seller,” Karpenko explains.

As part of the investigation, Vedomosti journalist Alena Sukharevskaya visited the office of one of the companies offering exchange services on the market in the Moscow International Business Center, also known as the Moscow City. Denis Polohin, founder of the Berkut Corporation, told her the number of deals worth over $ 100,000 had increased in the last couple of years. About 50% of the deals are sealed with investors that want to participate in initial coin offerings (ICOs), 10% of his clients are traders and 10% dealers. Another Moscow City-headquartered company, the International Cryptocurrency Center, which trades digital assets in partnership with the Estonian firm Aridika Asset Management, said it had between 10 and 15 customers every day.

Cash to Crypto Trade Blooming in Moscow, Reports SayThe publication also claims that 30% of the turnover registered by Moscow exchangers comes from merchants operating in the city’s major wholesale markets such as Moskva, Sadovod, and Food City. Earlier this year, Russian media reported that most of them are Chinese nationals who use cryptocurrency for cross-border payments for the goods they import from the People’s Republic. Vedomosti has estimated the exchange shops make around $ 400,000 daily from an average commission of 1.5 – 2% on top of Bitfinex and Binance rates.

What is your opinion about the cash-crypto trade? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock.


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The post Cash to Crypto Trade Blooming in Moscow, Reports Say appeared first on Bitcoin News.

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