Brazillian Court Upholds Decision Against Santander Bank Vs. Mercado Bitcoin

Wilfred Michael 

Wilfred Michael

News reporter

17 June 2019,
21:22
Brazillian Court Upholds Decision Against Santander Bank Vs. Mercado Bitcoin

Santander Bank Brazil was on the losing side of a recent decision made by the Court of Justice of the State of São Paulo, Brazil and entered into the Official Gazette during the weekend.

The local financial institution had appealed an earlier court ruling which ordered that it returned funds belonging to Mercado Bitcoin, a Brazil-based cryptocurrency exchange that it had seized its funds over allegations that the nature of the firm's business did not comply with the Bank's policy.

It was under those claims that Santander as we reported in March, seized up to R$1,350,733.00 or appr. $350,000 belonging to Mercado Bitcoin.

However, the court ruled that Santander Bank's actions were an "abuse of law since it is not liable to seize resources deposited in the current account of its account holders, due to fraudulent transactions carried out by third parties."

The Bank was ordered to pay back the seized funds with a 1% interest for the period during which it held the funds, with the total sum now amounting to 200,000 reals ($51,000) at the time of the latest ruling.

Santander Bank would also foot the legal bills by Mercado Bitcoin, a payback that makes the victory a resounding one for local cryptocurrency exchange.

Meanwhile, entry into the Official Gazette means that the latest court ruling would likely become a precedent for any similar cases between a Brazilian Bank that tries to stop a cryptocurrency exchange from using its facilities, although this remains a problem in several other countries.

In India, for instance, we reported that the country's Central Bank banned local banks from doing business with cryptocurrency exchanges. The local banks, in turn, included a term-of-service clause that stops citizens who transact cryptocurrencies from opening bank accounts or operating existing ones.

 

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