In a landmark decision that will no doubt delight millions of people, Israel’s Supreme Court has issued a temporary court order which prohibits Leumi Bank from restricting the banking activity of crypto broker Bits of Gold. Finance Magnates reported on Feb 26th.
The Supreme Court’s decision to revoke the prohibition of the restriction of crypto brokers, is a decision that has been hailed as “precedent-setting”, which means that banks in general cannot limit accounts associated with the crypto industry.
June of 2017 saw the district judiciary court in Tel Aviv support Leumi Bank when Bits of Gold had gone after a court order after being denied service by Leumi. The bank’s reason for doing so was an inability for bitcoin transactions to follow Israel’s anti-money laundering laws as the reason for the service denial.
In December of 2017 the bank had also began actively blocking customer payments to some bitcoin exchanges, citing the Israeli law against gambling and instructions from the Bank of Israel as the cause for halting these payments to “websites that execute gambling transactions.”
After the Supreme Court’s decision, this time it is favourable to Bits of Gold, local news outlet the Globe reported that Yuval Roash, the CEO of Bits of Gold, said in a statement.
“The court’s decision enables us to continue to focus on the base of the crypto community in Israel. We were the first to request the creation of rule for the activity of digital currencies and the first to stand by those rules.”
Judge Anat Baron, who oversaw and ruled the case, said that since the bank’s decision to terminate Bits of Gold’s account was based on an assumption that it violates the law, however the lack of any violations over the past 5 years supports the decision of undoing those restrictions.
However, Judge Baron also adds that the court order is “not intended to harm the bank’s right to analyze with specificity every transaction that takes place with the bank account or to take any actions that are related to minimizing risks, which become transparent through the activities of the company.”
The law firm that represented Bits of Gold, had issued a statement and said that they are:
“Very pleased with the courageous decision of the Supreme Court. This is a precedent-setting decision whose importance cannot be overstated in relation to the trading of digital currencies.”
Israel has been developing a set of guidelines in relation to cryptocurrencies to help regulate them. Israel’s tax authority also reported last week that it would consider cryptocurrencies as property in terms of taxes, and in August 2017, the Israeli Securities Authority panel announced that they would potentially begin to regulate ICOs (Initial Coin Offerings).