The bank alleges that Buda’s service is used to “perpetuate fraud.” The exchange said that the theft of bank credentials had nothing to do with them.
New friction arises between bank Itaú and exchange Buda before the Free Competition Defense Tribunal (TDLC) in Chile, due to confrontation between both parties. On the one hand, the bank is accusing the cryptocurrency exchange of serving to “perpetuate fraud”. On the other hand, the exchange defends itself by saying that it is applying the relevant regulations.
Itaú filed the bank’s indictment with the TDLC last February, citing a case of identity theft and fraud of USD 26,000. The bank claims that someone transferred one of its customers’ money without authorization to a Buda account at the bank itself.
In late February, Itaú’s lawyers said that the criminal used forged bank details of the customer, a false e-mail account, and a digital copy of her identity card to transfer 20 million Chilean pesos (CLP) (equivalent to USD 26,000) from her checking account to the platform Buda.com, according to local media.
Once the detection of the fraud occurred, the customer filed a complaint with the Public Ministry. At the same time, Itaú pointed the finger at Buda by saying that the exchange does not have effective regulatory compliance systems.
Response from Exchange Buda to Itaú
Buda, which operates with cryptocurrencies such as Bitcoin (BTC) is on the other side of the shore. Concerning the accusation and the news report, the company regretted what happened to the bank’s customer and her case of identity theft.
Diego Vera, Head of Communications for Buda, explained that they do not know the reasons why they are being accused of promoting scams. He explained that the theft of the credentials was from the account with bank Itaú, not from their platform.
The criminal decided to spend the stolen money on cryptocurrencies but could have done so on anything else, according to the spokesperson. Vera compared what happened to a hypothetical case in which a thief robs a bank and buys a television with the money. He asked whether it was the fault of the person who sold the television or the lack of bank security.
Concerning the indications that they do not apply regulatory measures, the representative of Buda mentioned that it uses dynamic keys to access the platform, know-your-customer (KYC) measures to create accounts to be able to operate, the prohibition of logging in from unregistered IPs (until confirmed by e-mail) and sending of a selfie holding identity documents for the verification of accounts.
The long history of the confrontations between Itaú and Buda started in 2018. In April of that year, the cryptocurrency exchange, jointly with the CryptoMKT exchange, initiated actions against banks before the TDLC for closing checking accounts.
“Buda did not comply with regulations to prevent money laundering,” responded Itaú. The bank claimed that it was not an arbitrary decision, but rather a detailed investigation. In January 2019, the TDLC ruled in favor of cryptocurrency exchanges, implementing a protective measure to prevent banks from closing accounts of exchanges.
By Alexander Salazar