TL;DR Breakdown
- Italian bank fined $144 million for customer violation.
- Banks are under economic scrutiny amid the Russia-Ukraine war.
- UniCredit appeals the court decision.
UniCredit, the Italian second-largest bank, has been fined $144 million after losing a case against a cryptocurrency miner. The miner accused the bank of erroneously canceling his account. In the meantime, however, matters have not concluded, and it appears that the bank has appealed against the decision.
Italian’s UniCredit faces a legal financial backlash
The statute has imposed the fine, and the Italian bank will be required to pay it. According to a news article published by La Repubblica, the Bitminer Factory filed a lawsuit against UniCredit two years ago. Following the judicial process, the factory received compensation for the accounts closed by the bank today.
The legal dispute began when UniCredit, a bank based in Bosnia and Herzegovina, closed down Bitminer Factory’s business accounts that a division of the firm held. The verdict got handed down in the Banja Luka courtroom in Bosnia and Herzegovina. A subsidiary of the Italian company Bitminer Factory, which bills itself as the first and biggest mining farm in Italy, filed a complaint against the bank.
Bitminer Factory alleges that Unicredit’s closure of its financial accounts was a major disaster for the firm, compromising its renewable energy mining project in the country. The court determined that there was enough evidence. Hence Unicredit was compelled to pay around $144 million to reimburse the losses.
The bank claimed they were not in the cryptocurrency business; therefore, they closed the accounts. The court disagreed, claiming that the bank had no written rules prohibiting it from dealing with customers in the cryptocurrency sector. As a result of this, Bitminer Factory won its lawsuit. Additionally, the firm said that the closure of its accounts was delaying the launch of its ICO.
In an effort to defend itself, the Italian bank claimed that it does not have any relationships or partnerships with digital currency providers and exchange platforms. The UniCredit stance doesn’t come as a surprise to the crypto community. Many banks throughout the world are taking a similar stance. For example, in India, the status quo is shifting daily.
Banks under scrutiny amid Russia-Ukraine war
In the current era filled with global tensions, cryptocurrency has been able to play both sides of the coin. Cryptocurrency proved to be a tremendous help in these times of war. However, many experts have condemned crypto for its potential role in Russia, circumventing sanctions and enabling criminal acts. It is, however, the banking sector that has proven to be ineffective in this regard.
The ongoing Ukraine crisis has put UniCredit’s Italian operations back in the spotlight. The bank said it would write off its Russian business, including cross-border exposure, and valued it at $8.1 billion. The Italian bank intends to buy back its shares. However, it will be reliant on losses incurred as a result of Russia-related assets.
According to Cryptopolitan, the Japanese government has submitted an amendment to its foreign exchange laws in order to regulate cryptocurrency exchanges. The plan is part of the government’s campaign to impose trade restrictions against Russia. If the bill passes, digital asset exchanges will fall under the country’s banking regulations.
Lastly, the European Commission has fined investment banks, including Bank of America, Natixis, Nomura, NatWest, UBS, UniCredit, and Portigon, for participating in a government bonds trading cartel. They’ve been penalized $407 million for “engaging in an unlawful European Government Bonds trading cartel.”
