Nine Chilean cargo shipping companies approved to develop joint blockchain platform

Nine Chilean cargo shipping companies approved to develop joint blockchain platform

It could become the first of its kind blockchain maritime cargo platform in the region

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Chile’s National Economic Prosecutor’s Office, or FNE, has granted approval to nine national freight maritime cargo companies to establish a joint venture to develop a blockchain platform, the first of its kind in the region.

According to MundoMaritimo.cl, the platform will be named Global Shipping Business Network, or GSBN. It aims to handle all the processes related to maritime cargo such as document issuance and cargo clearance, among other services.

The solution is also expected to be offered to other companies in the industry and not just those involved in its development. As per the resolution issued by the FNE, CMA CGM, Cosco Shipping Lines, Cosco Shipping Ports, SIPG, Hapag-Lloyd, Hutchison Ports, OOCL, PSA, and Qingdao Port will be in charge of the GSBN’s development. The budget for the blockchain platform’s development was not disclosed.

Commercially sensitive information is not expected to be transferred through the GSBN blockchain platform, and Cointelegraph Spanish reported this meant it was possible to rule out the concern the use of the GSBN platform could facilitate „coordination“ between the Shipping Constituents.

The project has been presented to the competition agencies of the United States, South Korea, Poland, and Ukraine, but there are no reports about their opinions about the platform as of press time.

Companies involved in the project were advised by Philippi Prietocarrizosa Ferrero DU & Uría (PPU) which is led by the Free Competition partner Ignacio Larraín together with the associates Álvaro Espinosa, Gabriel Budnik, and Matías Palma, who are well-known players in the local’s cargo industry.

Recently, the Port of Rotterdam in the Netherlands launched a blockchain-based pilot with some of the world’s leading shipping companies to improve the safety and efficiency of millions of containers that are unloaded in the port every year.


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It could become the first of its kind blockchain maritime cargo platform in the region

Estonia Grants License to Chilean Crypto Exchange

Estonia Grants License to Chilean Crypto Exchange

CryptoMarket has joined the ranks of Latin American crypto companies regulated in the EU

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Chile’s crypto trading platform CryptoMarket has obtained a license issued by the Estonian Financial Intelligence Unit (FIU), allowing it to provide services for the purchase and sale of crypto assets.

Founded in 2016, CryptoMarket joins a select group of Latin American crypto companies operating in the region, with Bitso (Mexico) and Mercury Cash (Venezuela) obtaining licenses from Gibraltar and Estonia respectively.

The exchange, which has 150,000 users and operations in Chile, Brazil, Argentina, and Europe, had to incorporate a representative in Estonia to obtain the license. It was subject to an internal audit, underwent a criminal background check and had to demonstrate compliance with regulations around Know Your Customer (KYC) protocols and Anti Money Laundering (AML). Estonia tightened AML regulations in relation to cryptocurrency trading last year.

„Obtaining both licenses was hard and complex work for CryptoMarket, but the result warrants it,” said Denise Valdivia, CryptoMarket’s COO. CryptoMarket’s website now boasts of being an “EU regulated institution”.

European crypto regulations more advanced

While a report late last year from the Association of Banking Supervisors of the Americas (ASBA) highlighted the interest of Chilean regulators in the cryptocurrency ecosystem, the legal framework is not yet clearly defined there.

Rafael Meruane, CryptoMarket’s CEO and co-founder, praised European regulation as innovative and superior at this stage:

“Our vision of connecting more people to a new financial system needs innovative regulatory frameworks that enhance the creation of more competitive financial services, while at the same time granting the highest security standards for users and in that context. Regulation in Europe is significantly more advanced than in our region.”


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CryptoMarket has joined the ranks of Latin American crypto companies regulated in the EU

Chilean Government Introduces New Cryptocurrency and Fintech Regulation Bill to Congress

Chilean Government Introduces New Cryptocurrency and Fintech Regulation Bill to Congress

Chilean Minister of Finance Felipe Larraín announced the introduction to Congress of a bill regulating cryptocurrencies and fintech

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The Minister of Finance of the Chilean government Felipe Larraín announced the introduction of a bill regulating cryptocurrencies and fintech to Congress, Cointelegraph Spain reported on April 15.

During his recent stay in the United States, Larraín reportedly noted that the requirements introduced by the new regulation will be proportional to businesses. He explained that the rules will take into account that various companies have different business models, and deliver different services that imply different risks for the users and the financial market.

Local media outlet Ahora Noticias reported that flexibility is among the most important aspects of the bill, since the pace of technological progress is so great. Per the report, Chile is home to a growing number of cryptocurrency exchanges that are currently not regulated. Furthermore, Larrain also reportedly warned the public about the risks of this kind of investments, stating:

“Regulation of these platforms would mitigate some of the risks, such as money laundering and terrorist financing, and increase the legal certainty with which they operate. We want to adequately protect against the risks associated with this kind of activity.”

As Cointelegraph recently reported, the Central Bank of Chile expressed the idea that cryptocurrencies are unable to substitute traditional money.

Also, at the beginning of the current month, the Chilean anti-monopoly court has again granted protection to local cryptocurrency exchanges by forcing banks to keep their accounts open.


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Chilean Minister of Finance Felipe Larraín announced the introduction to Congress of a bill regulating cryptocurrencies and fintech

Chilean Central Bank: Cryptocurrencies Are Unable to Substitute Fiat Money

Chilean Central Bank: Cryptocurrencies Are Unable to Substitute Fiat Money

Central Bank of Chile states cryptocurrencies will not substitute fiat money unless they get a comprehensible legal framework

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The Central Bank of Chile (BCC) believes that cryptocurrencies are unable to substitute traditional money, according to an in-depth report on crypto issued Feb. 7.

The document, signed by the central bank’s president Mario Marcel, was prepared upon request of the Tribunal de Defensa de la Libre Competencia (TDLC). The TDLC is an independent anti-monopoly institution established to ensure that free competition rules are not violated in Chile. The organization actively participated in a recent legal battle between Latin American crypto exchanges and Chilean banks.

As per the BCC, Bitcoin (BTC) and other major cryptocurrencies that were created as alternatives to fiat money, are now at an early stage of development. Therefore, it is difficult to predict whether or not they will continue to evolve. However, the BCC itself remains sceptical about the future of the industry:

“Currently, there is no evidence that would allow the conclusion that Bitcoin, or any other crypto asset, or crypto assets in general, will substitute legal currencies. […] To achieve that goal,  relevant legislative framework and regulation have to be adopted.”

The report also mentions volatility, limited acceptance and slow payments processing as the key obstacles to the mass adoption of crypto. Regarding statistics on businesses that accept crypto as payment in Chile, BCC stated that the crypto market in the country is “negligible” in comparison to the traditional one.

The document also hints at a possible approach to crypto regulation in Chile. According to the BCC, cryptocurrencies might be treated as intangible assets and a digital representation of value, which converts them into property. In that case, they could be used as a medium of exchange to purchase goods and services without any additional restrictions.

The BCC report comes almost a year after the case involving local crypto exchanges Buda, CryptoMkt and Orionx began. The three firms started a legal battle in April, soon after their banking accounts were closed by several Chilean banks. The antimonopoly court managed to grant protection to the exchanges, despite the Supreme Court’s ruling to keep the accounts closed.

Chile has not yet introduced clear legal framework for regulating cryptocurrency. However, the government seeks to control crypto profits. This January, the Chilean Internal Revenue Service obliged taxpayers to mention crypto gains when they calculate annual income tax, given that crypto falls under the definition of intangible assets.


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Central Bank of Chile states cryptocurrencies will not substitute fiat money unless they get a comprehensible legal framework

Chilean Taxpayers Must Report Cryptocurrency Profits to Chilean IRS: Local Media

Chilean Taxpayers Must Report Cryptocurrency Profits to Chilean IRS: Local Media

Cryptocurrency profits must be reported to the Chilean Internal Revenue Service by local taxpayers, local crypto media reports

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Chilean taxpayers must report their cryptocurrency profits to the Chilean Internal Revenue Service (SII), Spanish crypto media Diario Bitcoin reports on Jan. 17.

The SII reportedly decreed in 2018 that digital currencies weren’t subject to Value Added Tax (VAT), but should still be considered when calculating annual income tax, as they fall into the definition of intangible assets.

Because of this consideration, the dedicated income tax form 22 will reportedly include — for the first time — a special section dedicated to “other own and/or third-party income from companies that declare their effective income and do not declare it to full accounting, attributed…”

DiarioBitcoin reports that, while it is not explicitly stated in the form, an SII statement released at the end of 2018 noted that taxpayers should report their income from the sale of foreign fiat currencies and cryptocurrencies in the aforementioned section.

As Cointelegraph reported at the beginning of the current month, the Chilean anti-monopoly court has again granted protection to local cryptocurrency exchanges by forcing banks to keep their accounts open.

In April 2018, news broke that Chilean cryptocurrency exchanges BUDA, Orionx and CryptoMarket (CryptoMKT) had applied to an appeals court to confront the banks that shut down their platforms’ accounts.


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Cryptocurrency profits must be reported to the Chilean Internal Revenue Service by local taxpayers, local crypto media reports

Chilean Treasury Launches Blockchain Platform to Process Public Payments

Chilean Treasury Launches Blockchain Platform to Process Public Payments

The Chilean Treasury launches a blockchain platform that unites taxpayers, public institutions and banks

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The Chilean General Treasury of the Republic (TGR), which oversees tax collection in the country, has launched a blockchain platform to process payments, according to a press release published Dec. 19.

TGR — a dependent institution under the Ministry of Finance — reportedly first met with the Digital Government Division of the Ministry General Secretariat of the Presidency of Chile to discuss the pilot in October, 2018. At that time, officials announced they would create a blockchain platform to connect citizens, financial intermediaries and suppliers.

According to the December statement, the pilot for the platform has now been launched. The platform stores transactions that are processed by Chilean public institutions — such tax payments or patent fees — on blockchain. Before recording the transaction, all nodes participating in the process are obliged to approve it.

TGR reports that it hopes a common database used both by government, institutions and banks will help to eliminate data discrepancies, reduce time spent on payments, as well as cut operational costs, while providing the necessary level of security for personal data.

The Chilean government is exploring blockchain in several areas, including the energy and finance sectors. In April, Chile’s national energy regulation organization announced the launch of a project based on the Ethereum (ETH) blockchain to record data from the nation’s energy sector.

The Chilean Parliament is now examining a bill on blockchain adoption that was presented by local MPs in October. The proposal suggests carrying out studies on the advantages of blockchain-based security and energy solutions.


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The Chilean Treasury launches a blockchain platform that unites taxpayers, public institutions and banks

Chilean Banks Urge Anti-Monopoly Court to Revoke Decision Protecting Crypto Exchanges

Chilean Banks Urge Anti-Monopoly Court to Revoke Decision Protecting Crypto Exchanges

Two major Chilean banks have applied to the anti-monopoly court in order to cancel its decision protecting crypto exchanges

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Two major Chilean banks have urged the country’s anti-monopoly court to revoke its decision that prevents the closure of local crypto exchanges’ banking accounts. This development was reported by Chilean newspaper La Tercera on Thursday, Dec. 20.

Banco del Estado and Itau Corpbanca took legal action following the recent Supreme Court ruling against Chilean crypto exchange OrionX: the decision stated that banks have the legal right not to provide services to crypto firms.

However, the previous ruling of the Tribunal de Defensa de la Libre Competencia (TDLC) — the country’s anti-monopoly court — still stands and grants protection to crypto exchanges. The two banks now insist that the TDLC has to comply with the Supreme Court’s ruling and revoke its injunction.

The attorneys representing Banco del Estado and Itau Corpbanca state that cryptocurrencies are not regulated by Chilean law, and that therefore providing them banking services could lead to certain risks, including money laundering.

As Cointelegraph reported, the legal battle started in March, when crypto exchanges CryptoMKT, Buda.com and OrionX claimed that their banking accounts were closed by several Chilean banks. The anti-monopoly court soon granted them protection, and Chile’s Minister of Finance Felipe Larrain promised to come up with relevant crypto regulation.

Nonetheless, several months later the legislation is still in progress. As Larrain said in early December, “there is no magic wand to solve” issues related to a crypto legal framework.


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Two major Chilean banks have applied to the anti-monopoly court in order to cancel its decision protecting crypto exchanges

Chilean Government Making Progress on Crypto Regulation, Says Finance Minister

Chilean Government Making Progress on Crypto Regulation, Says Finance Minister

The Chilean finance minister said the government is “making progress” on creating a robust regulatory framework for cryptocurrencies

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Chile’s Minister of Finance Felipe Larrain claims that a group of state institutions “is making progress” in developing crypto regulation, local daily newspaper La Tercera reports Friday, Dec. 7.

According to Larrain, the Ministry of Finance is working with Chile’s central bank and Financial Stability Board to provide a balanced legal framework for the crypto industry. He noted that crypto regulations are but one aspect of a wider project to provide legal definitions for the fintech sector. Larrain noted that crypto regulation might take time:

„We are aware that it is important to move in this direction. But all countries in the world are facing similar problems [with crypto regulation], and there is no magic wand to solve them. We are exploring the best solutions to see how to regulate this brand new phenomenon.”

In March, following the closure of crypto-business accounts in major Chilean banks, Larrain promised to develop a legal framework to normalize the situation. Nine months on however, no such legislation has come forward, although the Chilean parliament has made some forays into regulating blockchain technology.

Larrain’s recent statement comes shortly after a Chilean Supreme Court decision, annulled a previous ruling by an anti-monopoly court to protect local crypto exchange Orionx and to reopen its banking accounts. In the decision, a judge claimed that cryptocurrencies “have no physical manifestation and no intrinsic value.”

Despite the alarming publications in local media, Chile’s crypto entrepreneurs told Cointelegraph that the new decision has nothing to do with prohibiting crypto exchanges. Both Orionx and Buda.com, which have been involved in a legal battle since March, assure that their banking accounts will not be affected, as the anti-monopoly court’s decision is still in force.


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The Chilean finance minister said the government is “making progress” on creating a robust regulatory framework for cryptocurrencies

Inside Chilean Power Battle: Crypto Exchanges vs. State Banks

Inside Chilean Power Battle: Crypto Exchanges vs. State Banks

How crypto exchanges filed a petition against Chilean banks: the prerequisites and aftermath

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On Monday, Dec. 4, the Chilean Supreme Court welcomed the decision of state-owned Banco del Estado to close the accounts of local cryptocurrency exchange Orionx. The new phase in the legal battle between the banks and several crypto exchanges — including Buda.com and CryptoMarket (CryptoMKT), which had appealed against the denial of services — may look somewhat sinister from the outside. But the main players of the Chilean crypto market assured Cointelegraph that the recent decision could not prevent them from operating in the country.

Exchanges vs. banks — a brief outline of the confrontation

In March, two crypto exchanges — Buda and CryptoMKT — came out with a joint statement, claiming that some banks in Chile had closed their accounts. “We are killing the whole industry long before exploring it and understanding its approach,” the release read. CryptoMKT also claimed that another bank received instructions not to deal with anyone who is related to cryptocurrencies. Both crypto businesses then urged the Chilean Association of Banks (ABIF), which coordinates all the private and foreign financial institutions in the country, to intervene — or at least clear up its stance on cryptocurrencies.

A response was given within a few days of the statement: The president of ABIF, Segismundo Schulin-Zeuthen, told Chilean business outlet Diario Financiero that the banks were free to moderate relations with their clients. Schulin-Zeuthen also criticized Buda and CryptoMKT for “[generating] false judgments about the institutional role of the ABIF,” while the association’s role consisted of discussing and analyzing existing regulation in the finance sector.

The bank that closed the crypto exchanges’ accounts was soon revealed to be Itau Corpbanca, the fifth-largest bank in Chile, along with a branch of Latin American banking giant Itau Unibanco and Scotiabank Chile, a branch of a Canadian banking group by the same name. They were soon joined by Banco del Estado — the only public bank in the country managing up to $52 billion in assets, as of 2017.

Later in April, Itau Corpbanca opposed the crypto industry’s stance that the move was illegal and insisted that the closure of accounts result in an internal investigation. According to Itau, Buda had failed to comply with their Anti-Money Laundering (AML) policy. Moreover, the bank accused the exchange of failing to verify the users’ data, as Buda’s website only requested basic information during the registration and did not verify the identities of its clients.

The whole story, including the media coverage and official responses, fueled a huge backlash on social media. As Cointelegraph reported in April 2018, crypto enthusiasts blamed financial institutions for “a huge negative blow to Chile’s reputation as a rational, innovation-friendly, free market economy,” stating that those actions “stifle innovation.” Twitter users created a hashtag #ChileQuiereCrypto (Chile wants crypto), urging the government to resolve the problem with crypto exchanges.

Chilean Banks Against Crypto Exchanges

In mid-April, the Chilean crypto exchanges decided to fight for their rights and started a legal battle, applying to Tribunal de Defensa de la Libre Competencia (TDLC) — an independent, anti-monopoly institution established to ensure that free competition rules are not violated. Buda and CryptoMkt, joined by Orionx (whose accounts had also been closed), had filed a petition against several banks, including Itau Corpbanca, Scotiabank and Banco del Estado.

Guillermo Torrealba, Buda’s co-founder and CEO, summed up the whole turmoil in an comment for Cointelegraph:

“There hasn’t been one regulator, legislator or government official saying that cryptocurrencies aren’t legal, it was just the decision of a very powerful sector of the economy: the banking industry.”

Blockchain regulation instead of crypto promises

Only a few weeks after the first complaint, TDLC ruled against Banco del Estado and Itau Corpbanca, forcing them to re-open Buda’s accounts.

Later in June, the same decision was made in favor of Orionx. As the company wrote on its official Facebook page, the anti-monopoly court ordered Banco del Estado and Banco de Chile — another major bank in the country that was mentioned in the initial lawsuit — to reopen Orionx’s accounts within three days.

It would be logical to assume that the long-term battle would force Chilean authorities to introduce relevant legislation on cryptocurrencies to prevent such situations in the future.

In late March, following the first news of the closure of the crypto accounts, Diario Financiero spoke to Chile’s Minister of Finance Felipe Larrain. He was reassured that both the Ministry and the Central Bank of Chile had started exploring the possibility of crypto regulation to normalize the situation:

“Technical progress and the digital economy bring people new services; we have to consider this fact. But when the regulation issues arise […], we have to avoid situations that could affect the normal development of markets and healthy competition.”

Chile’s central bank reaffirmed that intention in May. Mario Marcel, the president of the institution, proposed incorporating the crypto regulation in order “to allow having a registry of participants in these activities and thus have information to monitor the associated risks.” Marcel also stated that the industry needed more transparency and consumer protection — as cryptocurrencies could possibly be involved in illicit activities, such as money laundering and the financing of terrorists.

Six months after the recent claim, there is still no sign of a legal framework for cryptocurrencies in Chile. In October, local deputies instead introduced a resolution on blockchain adoption to the lower house of the country’s parliament. Miguel Angel Calisto and Giorgio Jackson — along with eight other MPs — urged Chile’s President Sebastian Pinera to implement blockchain in all the country’s public areas, along with carrying out studies on the advantages of decentralized security and energy solutions.

The Supreme Court comes into play

A new, unexpected chapter began on Dec. 4, when the Chilean Supreme Court published its resolution in favor of Banco del Estado. As cited by major Chilean newspaper El Mercurio, the document reads:

„The resolution taken July 11, 2018, is revoked. It is declared in its place that the protection appeal filed by Orionx SPA against the Banco del Estado is rejected.“

The Supreme Court further explained that the actions conducted by Banco del Estado were not “unjustified” or “illegal,” as the bank acted correctly and did not violate any rules of the Chilean constitution. Moreover, the top court stated that the cryptocurrencies “have no physical manifestation and no intrinsic value.” The document also proclaimed that they are controlled neither by a government nor by a corporation, citing the characteristics of crypto as reasons for letting banks refuse services to the exchange.

No pasaran: How Chilean crypto exchanges treat the highest court’s decision

Despite the apparent harshness of the Supreme Court’s decision, Chilean crypto exchanges believe it will have no bearing on the case. Reacting to the aforementioned resolution, Orionx published a statement on their official Facebook page:

“Orionx wants to clarify that this ruling does not imply the closure of the company’s current bank accounts. [D]ue to the fact there is a current precautionary measure issued by TDLC, which prevents banks from closing the mentioned accounts.”

Moreover, Orionx emphasizes that it disagrees with the arguments provided by the Supreme Court and regrets the latest ruling.

Buda shares the same stance, also citing the ruling of the anti-monopoly court in its official statement:

“The valid ruling in our favor pronounced by TDLC assures that our bank accounts will be maintained during the trial that is held in the mentioned court.”

Moreover, the firm insists that the Supreme Court’s resolution on Orionx has nothing to do with their company. Speaking to Cointelegraph, Buda’s co-founder Agustin Feuerhake said:

“The situation with Buda.com has been slightly different. Since [the] very beginning[,] we had a relevant KYC [Know Your Customer] policy. We also tackle money laundering and terrorism financing, so the bank’s argument to close an account does not apply to our case. There are no anonymous users on Buda.com.”

Feuerhake further added that the Chilean courts are not evaluating the ban on crypto exchanges, but rather seek ways to “condemn banks for abusive behavior” toward them.

As the decision of the Supreme Court did not mention Buda and CryptoMKT, it might be a turning point in the plot. The legal framework for crypto, if introduced, could side with crypto exchanges or stand with the banks.


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How crypto exchanges filed a petition against Chilean banks: the prerequisites and aftermath