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Cade changes position and opens process to investigate banks for closing bitcoin brokerage accounts


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The Administrative Council for Economic Defense (Cade) will open administrative proceedings against banks for closing accounts of companies in the cryptocurrency sector. The decision was rendered on Wednesday (13) by the counselor Lenisa Rodrigues Prado.

According to a decision issued by Cade's counselor, banks that hold a dominant position in the market did not provide “reasonable justifications to legitimize the closing of current accounts and the refusal of new contracts”.

The decision of Cade's Counselor goes against what the General Superintendence (SG) understands. When analyzing the appeal presented by the Brazilian Association of Cryptoactive and Blockchain (ABCB), SG maintained the previous decision to close the administrative inquiry as it understood that there was no evidence of breach of the economic order in the acts committed by banking institutions.

Cade and the new decision

Prado, on the other hand, mentioned that why disagree with SG's decision. According to her, cryptocurrency brokers are being "harmed by the closing and the refusal to open current accounts", as this is a prerequisite for these companies to be able to act in the prevention of financial crimes.

"Now, if current accounts are being arbitrarily closed by Brazilian banks, it will not be possible to meet the requirements of laws aimed at preventing financial crimes, especially with regard to 'money laundering'".

She explained that bank accounts allow "financial transactions to be traceable and enforceable".

In addition, companies in this sector, which are Corporations, need bank accounts "to comply with the provisions of Law No. 6,404 / 1976 related to the payment of capital, distribution of profits / dividends and compliance with exchange rules".

Similar views in Cade and STJ

These arguments presented by Prado, however, were only to defend “the essentiality of current accounts in the exercise of the core activities of crypto brokers”. The Councilor's point of view, therefore, converges with that presented by the minister of the 3rd Panel of the Superior Court of Justice (STJ), Nancy Andrighi.

In the judgment of Special Appeal 1696214 / SP, involving the Bitcoin Market and Itaú, the minister defended the current account as an essential infrastructure for the business activity of companies in the cryptocurrency sector. Because banks and brokers operate in similar markets, Andrighi understood that the case was an anti-competitive act to be analyzed by Cade.

Banks, market dominants

For Cade's Director, the dominance of banks in the financial market is undeniable. She mentioned, therefore, that the General Superintendence itself even admitted that some banking institutions have the “dominant position – above 20% of market share under the legal presumption”. What in Prado's understanding can be quite dangerous for competition in the financial market:

“As is well known, the banking market in Brazil is concentrated and that if more than one agent among the 5 major players adopt similar behaviors, it would affect more than half of the market, and could even induce smaller competitors to adopt similar behaviors”.

Lack of regulation

The Superintendence-General, however, mentioned in the decision that ended the administrative investigation that cryptocurrency brokers would not compete in the same market as banks, as they are not regulated.

This point of view was also rejected by the Counselor. She clarified that the banks were not able to demonstrate the possible loss on the absence of CNAE (National Classification of Business Activity) specific to the cryptocurrency sector.

“Despite justifying that the absence of CNAE would make it difficult to identify cryptocurrency brokers, the Representatives did not prove that this obstacle would result in losses, not least because they were not listed what information is essential for opening accounts. It has also not been demonstrated that the banking institution has presented the problem to brokers, in order to allow the necessary rectification ”.

The Counselor then explained that "it is reasonable to admit that the CNAE code list is not updated as quickly as new products, services and markets emerge".

New chapter in Cade

Prado was then convinced that the act of banks against companies in the crypto sector needs to be investigated as there is a risk of dealing with anti-competitive conduct defined in art. 36 of Law 12.529 / 2011.

Such an act, according to this provision, is one in which one of the parties seeks to “limit, distort or in any way impair free competition or free enterprise” by dominating the “relevant market for goods or services”, increasing “arbitrarily” profits ”and“ abusing the dominant position ”.

This decision to open an administrative proceeding opens a new chapter in a story that seemed to be interrupted. Now with the creation of their own CNAEs, there is the possibility of a new look at these companies in a still embryonic sector, that of cryptocurrencies.

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