Israeli Court Rules Against One-Size-Fits-All Bitcoin Ban by Bank
The bank's position was that permitting crypto-related activity within accounts which it managed put it in danger of facilitating money laundering. As a result, it determined as early as 2014 to deny to supply services related to currencies.
Published at Tue, 19 Mar 2019 15:53:43 +0000
However, in a March 17, 2019, judgment, judge Limor Bibi composed that the bank's coverage was overly broad, according to the Israeli newspaper Calcalist. It’s”unreasonable,” he wrote, for banks to embrace a”sweeping policy” below which they ban all activity related to bitcoin or other cryptocurrency.
In short, after that, the court declared the right of banks to refuse to supply services for crypto-related actions if they might violate regulations. But banks can't even ban deposits or accounts simply because they demand crypto.
Broadly speaking, the judgment aligns with all the recommendations published earlier this month by Israel's fiscal regulator regarding the crypto market. The analysis encourages the government to support crypto businesses while emphasizing the significance of disclosures and oversight of crypto activity.
Rather, the court stated, banks will need to take into account the particular kind and range of crypto-related activity before determining whether to start an account.
The situation involved a lawsuit begun in May 2018 by Israminers, a bitcoin mining company based in Ukraine, contrary to the Union Bank of Israel. The bank refused to take deposits to the company'so accounts, and finally shut down the account as a lot of the cash in the accounts was associated with bitcoin.
That said, Bibi also composed that banks are within their rights to refuse to supply services for clients operating in the crypto market if a lender has a valid reason to believe that the clients might be attempting to launder cash.
The lender argued in court that it had informed the Supervisor of Banks, the Israeli government agency that oversees the banking business, of its coverage and was not advised that it could pose an issue.