Bitfinex backs Chilean crypto bank Orionx — eyes further inroads into South America

• Bitfinex has invested an undisclosed amount in Chilean crypto lender Orionx.
• The raise highlights growing crypto investment and activities in South America, with several big firms muscling into the region.

Crypto exchange Bitfinex has invested an undisclosed amount of funds in Chilean crypto bank Orionx as South America’s crypto scene is heating up.

“Bitfinex wanted to grow its presence in Latin America to markets that were less developed for crypto investing and where we expect considerable growth,” a Bitfinex spokesperson told DL News, saying both companies plan to use Chile as a springboard to launch further expansion into other countries in South America.

The Bitfinex representative told DL News that both companies are eyeing Peru, Colombia, and Mexico.

Taipei-headquartered Bitfinex’s investment into the crypto bank highlights a flurry of activity in the region, with rising inflation in many countries having triggered growing crypto adoption in South America.

Crypto exchange Coinbase recently expanded into Brazil at the same time as neobanks NuBank and Revolut are eyeing crypto services in the region.

Crypto transactions in South America amounted to $562 billion between July 2021 and June 2022, a 40% growth from the figures recorded in the previous reporting period, according to a 2022 report from blockchain forensics firm Chainalysis.

This growth has also seen at least 60% of adults in South American countries expecting crypto to become a reliable payment means in the next decade, according to an April survey by business intelligence firm Morning Consult.

While Bitfinex didn’t disclose the size of the investment, a spokesperson from the exchange said the cash injection would go towards investing “in education about investing and crypto, working with local universities in Chile.”

Regulatory clarity

Orionx bills itself as a crypto bank these days but it was established as an exchange in 2017.

“As a crypto bank we’re aiming to emulate most of the traditional financial products through crypto and blockchain, in an efficient and transparent way,” an Orionx spokesperson told DL News.

Back in 2018, the exchange was at the centre of a highly-publicised legal battle with Chilean banks that went all the way to the country’s Supreme Court.

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The Supreme Court ruled in late 2018 that banks could legally close the accounts of Orionx and other crypto exchanges. However, Orionx got a reprieve from the Court of Defense of Free Competition — Chile’s antitrust body — in a ruling delivered in early 2019.

The regulatory situation for crypto has improved in Chile since then with the country’s Financial Markets Commission ruling that cryptocurrencies are not to be considered as securities.

The Chilean senate also approved a fintech bill in late 2022 which is expected to be passed into law next year.

“The regulation in Chile will be in place in February of 2024 since the fintech bill was passed and we’re waiting for the rules from the regulator who has a deadline on that date,” the Orionx spokesperson said.

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