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Israel’s Tel Aviv court rules bank can refuse to accept deposits originating from crypto entities


A Tel Aviv District Court, for the second time, ruled that the Union Bank of Israel [UBI] will not be allowed to close the account of mining firm, Israminers Ltd. However, the bank can choose to refuse deposits originating from cryptocurrency entities, the court ruled.

Tel Aviv District Court Judge Limor Bibi, in her judgment, stated that the bank’s policy against depositing funds originating from anonymous cryptocurrency trades was justifiable, in order to curb money laundering and function in accordance with legal requirements like KYC.

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However, the court did rule that the bank’s sweeping policy “did not distinguish between activity, the scope of activity and different types of activity.” According to Bibi, the Israeli bank’s hostile stance to deny operating an account dealing with virtual assets was too ‘broad’.

Israminers had filed an appeal last year after a branch in the Tel Aviv area claimed that the firm had violated the bank’s policy.

This is not the first instance where an Israeli legacy banking entity was asked by the courts not to halt crypto-related activity and its clients, without a legitimate argument.

In May 2018, the same Tel Aviv District Court forced Israel’s biggest banking institution, Bank Hapoalim, to accept the transfer of funds resulting from a client’s Bitcoin sale, even when the account holder presented documents which clearly stated the exact source of the funds. The client was denied a deposit of $195k originating from a Bitcoin trading platform, following which the court refused the bank’s argument of there being a violation on the client’s side.

Earlier in March, the Israel Securities Authority [ISA] issued its final report on cryptocurrency regulation. The framework was outlined to bolster the crypto sector and secure the rights of the crypto investor.

The ISA with respect to cryptocurrency assets stated,

“The committee recognizes the great importance of the direct connection between the Securities Authority and the sector in order to further professionalism among its employees, recognition of the sector by the Securities Authority, study of its special characteristics, and providing a fitting regulatory solution for it.”

Anat Guetta, the Chairwoman of the ISA, had earlier asserted that the dynamic and innovative technology associated with crypto, was here to stay.


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