Chilean bank Itau accuses Buda exchange of forgery and illegal withdrawal of funds

Chilean bank Itau has filed a lawsuit in Competition Court against cryptocurrency exchange Buda, accusing it of falsifying documents and withdrawing client funds without authorization. The exchange denies its guilt.

The bank filed claims against Buda back in February, and on September 2, Itau filed a lawsuit with the Competition Court (TDLC), alleging that the exchange was fraudulent and not complying with regulatory requirements. According to the prosecution, at the end of February 2020, the management of the Chilean exchange Buda transferred $ 26,000 from the bank’s client account to the platform. Forged bank details, an email address and a digital copy of the ID were used to complete this transaction. 

Itau stated that the user profile was created in the name of the victim, on whose behalf Buda’s management allegedly illegally acquired cryptocurrencies on their site. The injured client of the bank turned to the prosecutor’s office, and Itau reopened the proceedings with the trading floor, accusing it of not taking appropriate measures to comply with regulatory requirements. Badu exchange spokesman Diego Vera denies the bank’s allegations, while expressing regret over the theft of the client’s bank data.

“We do not understand why the bank accuses us of fraud. The theft of user credentials occurred on Itau and not on our platform. Imagine that a thief robbed a bank and bought a TV with that money. Is it the fault of the person who sold the TV or the bank with a low security level? ”Vera said.

He also added that the bank’s allegations that Buda did not comply with regulatory requirements were unfounded. Before starting to trade on the site, the user must go through the KYC procedure. In addition, the exchange prohibits access from unregistered IP addresses.

This is not the first case between Itau and Buda. In April 2018, Buda and cryptocurrency exchange CryptoMKT sued Itau over the closure of their bank accounts. Ten months later, the court ruled in favor of the exchanges.

As a reminder, last year the Chilean government planned to consider a bill to regulate cryptocurrencies and fintech companies in order to prevent money laundering and terrorist financing.

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