Israeli banks cannot put a blanket ban on offering banking services to crypto-related customers, Attorney General Dr. Avichai Mandelblit stated in the Tel Aviv District Court.
Reported by the Globes on Wednesday, Mandelblit said that banks need to examine each case individually before refusing services to any crypto-related customers on the grounds of money laundering risks.
If the court stands alongside this argument, it is likely to bring stability in the crypto industry in the country, struggling until now, to receive proper banking services.
The report also pointed out that Mandelblit’s position on the matter contradicts the guidelines issued by the Bank of Israel in supervising banks.
The attorney general’s position in the matter was filed against Mercantile Discount Bank’s refusal to authorize a transfer from a BIT2C account to a bank’s partner-money account originating from trading in Bitcoin virtual assets.
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The position of Mandelblit is based on the recommendations made by an inter-ministerial team headed by Adv. Erez Kaminitz, deputy attorney general (civil law), and included representatives from various state agencies and departments.
Banks avoiding crypto firms globally
Similar to Israeli banks, the banks of multiple countries are hostile towards the crypto sector as their supervisory bodies are concerned about money laundering and terror financing using digital currencies.
Notably, the Indian crypto industry moved to the apex country against the country’s central banks’ order to the banks barring them from providing services to any crypto-based companies, crippling the sector in the country.
Though the Supreme Court heard arguments of both the parties, it is yet to make any decision.
Meanwhile, the Israeli Securities Authority (ISA) is embracing blockchain and is recommending the promotion of a digital securities trading platform in the country.