Israel’s Supreme Court Rules against Bank for Blocking Crypto Exchange’s Account
The Israeli Supreme Court has ruled in favor of a cryptocurrency exchange in a dispute between the Bits of Gold and Leumi Bank.
In its verdict, the Supreme Court ordered that the bank cannot use regulatory concerns as grounds for it to block the cryptocurrency exchange’s bank account.
But despite the court’s ruling, the bank has remained adamant regarding its earlier stance that it would not do business with the exchange, news outlet the Finance Magnates reported.
It remains to be seen how far the bank complies with the court’s orders.
Meanwhile, the Supreme Court’s ruling is seen as having set a precedent in the country. It means that crypto-related businesses and firms in Israel can now legally access and use banking services offered by traditional banks and other financial service providers.
The recent verdict comes after the same court had in 2017 given a ruling that favored Leumi Bank. In that case (separate from the recent one), the bank had ostensibly restricted Bits of Gold from accessing the exchange’s account.
According to the bank, concerns related to anti-money laundering (AML) and bitcoin (BTC) transactions. Leumi argued at the time that BTC transactions were not compliant with Israel’s laws on money laundering.
Last year, the Supreme Court’s verdict was that Leumi Bank could not justify blocking of account transactions on the basis that these transactions ended up at BTC exchanges, which the bank purportedly referred to as “websites that execute gambling transactions.”
In the latest ruling, Judge Anat Baron issued a temporary injunction that barred Leumi from taking any actions that would block Bits of Gold from using its bank account.
According to Judge Baron, the last five years have seen no AML violations reported regarding the exchange’s transactions. As such, he noted that the bank had no grounds to persist with its decision to block the cryptocurrency exchange’s account.
The judge, however, noted that the court’s decision and order do not stop the bank from in its efforts to scrutinize Bits of Gold actions. It doesn’t also prevent the bank from complying with its existing risk management policies.
The Supreme Court’ ruling comes under two months after the Israeli Securities Authority published the final recommendations aimed at crypto regulations. Issued in March, the report highlights some of the key measures needed to support the country’s cryptocurrency firms and businesses.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.