Two big Israeli banks arbitrarily block transactions in cryptocurrencies
With two cases relating to cryptocurrencies, Israel's courts have finally ruled against traditional banks.
Union Bank
Israminers , Bitcoin mining company sues Union Bank, the sixth largest bank in the country, Sunday, May 6.
The financial institution reportedly blocked Israminers' account so that it could not receive money from Bitcoin BIT2C. Union Bank went so far as to return the money already obtained.
On this same step, she hindered the purchase of mining equipment from Israminers while giving him a month to close his account. As a reminder, the cryptocurrency company was the customer of the bank, since 3 months before this incident.
Guy Penn, co-founder of Israminers and a lawyer at Penn & Co, filed an injunction against the bank at the Tel Aviv court, with a request for a temporary suspension of restrictions on the account. A complaint was also issued against the supervision bank.
Penn posted on Facebook: "In my humble opinion, we can not oppose the Israeli banking system. "
The lifting of the account blocking was granted to Israminers.
"Banks in Israel are currently rejecting the services of companies operating in the field of cryptocurrency, without even checking or identifying the activity concerned. The banks' refusal leaves us no choice but to sue them, otherwise the entire cryptocurrency community in Israel will have to relocate their business model abroad, " Penn told Bitcoin. com.
Hapoalim Bank
Hapoalim , the largest Israeli bank received a temporary injunction from Shalom and Lior Simon (father and son) on March 14, following the refusal of a transfer of $ 195,488 on their account. Referring to the risk of money laundering or terrorist financing associated with cryptocurrencies, the financial institution refused the plaintiffs' claim.
Still, the Simon presented the tax administration receipt with a complete file tracking their funds. Moreover, Israeli law clearly stipulates the obligation of banks to provide their services unless there is a valid reason.
Once the case was brought before a Tel Aviv court, Judge Limor Bibi deliberately asserted that the risk of money laundering was unfounded.
The bank was forced to position the money on the recipients' account.
Yair Mesalem of Doron, Tikotzky, Kantor, Gutman and Amit Gross Law Office, in charge of the case, told Finance Magnates that such actions from Israeli banks can only be motivated by the fear of a integrated in their Business Model.
Bank advisers Eli Doron, Asaf Gershgoren and Amit Moshe Cohen wrote on the firm's blog:
This is a non-trivial situation that forces the banking system as a whole to reconsider its policy on funds from virtual currency transactions, while conducting a rigorous review of each ad hoc transaction, rather than automatically revoking each transaction without have previously examined.Why do you think Israeli banks are so skeptical about cryptocurrencies? Let us know in the comments section below.
While I'm not sure as to why specifically Israeli banks are against cryptocurrency, I do believe that this is the general view for a majority of major banks that exist today. Cryptocurrencies are a new type of currency and the banking system is built on fiat currency. Banks are very old established entities and they must limit their involvement (risk) until these technologies have proven themselves to be all they stand for. It is also difficult to track what cryptocurrencies are being spent on and banks do not want to get their hands and feet in muddy waters.
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