The District Court of Tel Aviv ruled for the second time that it was not possible for Union Bank of Israel [ UBI ] to close the mining firm account of Israel’s ltd. The bank can nevertheless decide to refuse deposits from cryptocurrency entities, ruled the court.
Tel Aviv County Court Judge Limor Bibi stated in her judgment, in order to curb money laundering and to work according to legal requirements, that the policy against the deposit of funds originated in anonymous cryptocurrency trades was justifiable. In the wake of a lengthy appeal procedure, a judge of the District Court of Tel Aviv argued that the bank’s policies on cryptocurrency customers were not too broad.
At the same time, the judge considers it reasonable to argue that the “money trail” is in some cases not easy to determine and that this creates a risk of laundering money. The judge was therefore reasonable in considering the bank’s refusal to provide services relating to money deposited in the account.
However, the tribunal ruled that the bank “did not distinguish between activity, scope and various types of activity.” Bibi said that the hostile position of the Israeli bank in denying the operation of virtual assets accounts was far too “wide.”
The episode continues to regulate cryptocurrency trading patchwork by affecting the legacy banking system. As reported by Cointelegraph, various banks have had problems with cryptocurrency service providers and private investors.
In May 2018, the same District Court in Tel Aviv forced the bank Hapoalim of Israel to accept the transfer of funds from Bitcoin sales to a client, even though the account holder submitted documentation which clearly identified the source of the funds. The customer was denied a $ 195k deposit from a Bitcoin trading platform, which the court rejected the argument of the Bank that the customer’s infringement had taken place.
The Israeli banking system had to be told repeatedly by the courts that crypto businesses and users should not be blocked with reasonable reasons. For example, in May 2018, Bank Hapoalim (the largest bank in Israel) was forced to accept a transference from the sale of Bitcoin funds to a customer that had records tracking the trade from start to finish by the same Tel Aviv District Court judge.
Earlier in March, its final report on the regulation of cryptocurrency was published by the Israel Securities Authority [ ISA ]. The framework was designed to enhance the crypto industry and safeguard the investor’s rights.
“To provide a more effective regulatory infrastructure for this trade activity, the Committee recommends an adjustment to existing regulation to better address the risks involved in the trade,” explained the accompanying report.