Brazilian Crypto Exchange ‘Walltime’ Wins Lawsuit Against Caixa Econômica!
Regulation within the crypto space has seen a couple of financial institutions cross paths with regulators and crypto investors as well. The most recent case is from Walltime, a Brazilian coin exchange which took to court a local bank ‘Caixa Econômica’ for freezing funds well over the $200,000 mark!
The Preliminary Injunction Saving Walltime
News sources within the cryptocurrency arena have indicated that the court has favored Walltime on the preliminary injunction. The coin exchange has now found relief after being able to access the funds they had speculated for operation purposes. However, both parties are still waiting for the court’s final verdict on the issue.
A lawyer from Walltimme, Graziela Brandão, has spoken to news outlets indicating that this decision is an important mark for the entity. This is mainly because the bank had initially frozen a significant $212,000 rendering the exchange’s deposit and withdrawal operations non-functional. In addition, the lawyer noted that Walltime’s line of operation would need multiple bank accounts due to the grey area in crypto regulation right now.
Brandão went on to add that the coin exchange had lost more than the quarter million frozen by the Caixa Econômica bank initially. This means that Walltime has suffered significant financial loss that could only be recouped via indemnity actions in the coming days.
A couple factors within Walltime’s business operation cycle like loss of clients which eventually transforms to lower revenues had also been altered by the freezing of its fund. The coin exchange which is volume dependent lost a significant value in trading volumes due to the inefficiency of settlements to clients.
The lawsuit against Caixa Econômica was initiated at the beginning of Q2 in April 2018. Complainants claimed that the local bank breached a contract by blocking their account without any notice as it should have been. Instead, they were informed on 25th March that their account had been frozen three days earlier.
As it stands, Brandão argues that the move to freeze the accounts was totally against the stipulated regulations by the Brazilian central bank. Instead, the bank should have explained the reason of termination prior to taking action against any funds deposited in Walltime’s account.
Surprisingly, it turns out that Walltime has in the past faced similar issues against financial service providers but wasn’t successful as is the case right now. Brandão claims that the decision making in a previous case favored the other party mainly because the judge interpreted there being prior notice that Walltime’s account would be closed.
Chilean Coin Exchanges ‘Similar fate’
Walltime’s fate seems to be a common challenge in South America crypto markets as of press date. Earlier in 2018 Chile based coin exchanges had their accounts frozen in a bid to stop the growing cryptocurrency industry in the country. The entities have since proceeded to courts of appeal in pursuit for justice although it is only recently that one coin exchange won a lawsuit. Orionx won the lawsuit against Banco Estado which is accused to have breached the contract as per the law.
Despite the challenges, the crypto market is fast spreading in South America with two Brazilian football teams forming partnerships with Inoovi and Huobi coin exchange!