Zimbabwe Cryptocurrency Exchange Golix Takes Central Bank To Court Over Trading Ban

Zimbabwe cryptocurrency exchange platform Golix has dragged the country’s central bank, the Reserve Bank of Zimbabwe, to court over the trading ban made by the bank on cryptocurrency trading saying it was unconstitutional as there are no laws that give it the power to make such decisions.

Following its order stopping banks from processing cryptocurrency transactions in the country, the central bank of Zimbabwe went on to write to Golix- which runs a bitcoin ATM in addition to its online cryptocurrency exchange market- ordering it to stop its operations.

“All cryptocurrency exchange houses operating in the country, including Bitfinance (Private) Limited (also known as Golix), are required to cease all virtual currency exchange operations,” wrote Norman Mataruke, the central bank’s registrar of banking in a letter to Golix dated May 15.

Additionally, Mataruke ordered that cryptocurrency exchange platforms in the country are “required to take all the necessary steps to close the cryptocurrency accounts or ‘wallets’ of your customers and to make good any funds currently held on behalf of customers” operating in cryptocurrencies.

This has resulted to a legal encounter wherein Golix is trying to ensure that the High Court in Harare puts aside the orders of the bank.

“The ban in effect outlaws and classifies as illegal Applicant’s operations,” said Golix in its application to the High Court in Harare. “The Respondents are in fact purporting to classify the trade in cryptocurrency as illegal,” it added.

Plaintiffs are mentioned as the Reserve Bank of Zimbabwe and central bank governor, John Mangudya. Golix goes on to state in its court order that the move by the central bank to stop it from cryptocurrency trading in the country results to “lawmaking, a function that belongs to the legislature” and not eh central bank.

Presently, the country is going to through significant cash shortages, aggravated by a foreign currency crisis. Cryptocurrencies have becomes a way out of the cash crisis faced by the country, increasing the prices of the crypto assets against world averages in recent months.