Chilean Cryptocurrency Exchange Denies Fraud Allegations, Tribunal Set Rule on Complaint
Chilean cryptocurrency exchange, Badu.com has denied allegations that it fraudulently transferred client funds without authorization. The fraud allegations are being reported by Itau bank and both parties are set to appear before the country’s Tribunal for the Defense of Free Competition (TDLC), which must rule on the case.
The Itau Bank, which initially reported the complaint in February, reiterated its position on September 2 that Badu is perpetrating fraud by not adhering regulations.
According to a report in Criptonoticias, the bank is also accusing Badu of forgery and the use of a fake profile to facilitate the fraud.During the last days of February 2020, using forged bank details, a false email account, and a digital copy identity card, Badu managed to transfer $26,000 (20 million pesos) from a client’s current account to Buda.com. A user profile had been created in the name of this person (victim) and this was used to illegally to acquire cryptocurrencies.
The report adds that on detecting alleged fraud, the client reportedly made a formal complaint with the “Public ministry” while the bank reignited the longstanding feud with the exchange by reporting that Badu.com does not have effective compliance systems.
In response, an official with the exchange regretted the identity theft but expressed surprised at Itau bank’s allegations.
According to the exchange’s spokesperson, Diego Vera, “the reasons why they accuse (Badu) of promoting scams are unknown since the theft of the credentials was from the client’s bank account with Itaú, not from our platform.”
Vera further argues that it was not Badu’s fault that those behind the crime decided to purchase cryptocurrencies on its platform. Emphasizing the baselessness of the allegations, the spokesperson gives a “hypothetical case in which a thief robs a bank and with the money decides to go and buy a television.”
Vera asks rhetorically: “Is it the fault of the person who sells the television or the lack of bank security?”
Concerning allegations that the exchange platform does not fully adhere to regulatory requirements, Vera dismisses this by explaining that clients “use of dynamic keys when accessing the platform.” Furthermore, “know your customer (KYC) processes are undertaken before accounts are created while the use of an email to prohibit logging in from unregistered IP addresses is also enabled.”
Meanwhile, this case marks the second time the TDLC is asked to settle the feud involving Badu and Itau. In April 2018, Badu and another exchange, CryptoMKT complained to TDLC after Itau closed the pair’s checking accounts.
Ten months later, the TDLC ruled in favor of the exchanges.
What do you think of this haggling between the bank and the exchange? Share your thoughts in the comments section below.Korean Police Seize Crypto Exchange Coinbit Over Allegations of $84 Million in Wash TradesEXCHANGES | Aug 27, 2020Bitmex Restricts Ontario Residents as Mandated by Canadian RegulatorEXCHANGES | Aug 24, 2020Tags in this storyBank Fraud, chilean, Cryptocurrencies, Cryptocurrency Exchange, Identity Theft, Itaú Unibanco Holding S.A., KYC, KYC Compliance, Scams, Tribunal for the Defense of Free Competition
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