Israeli Courts Come to Defence of Cryptocurrency
- Two major Israeli banks tried to block cryptocurrency-related transactions, courts order them to accept.
Israeli courts have ruled against Israeli banks in two cases concerning cryptocurrency this week.
Union Bank
A lawsuit was initiated yesterday against Union Bank, the sixth largest bank in Israel, by a Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term mining company called Israminers.
Reportedly, the bank unilaterally decided to block the firm's account from receiving money from a Bitcoin Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term called BIT2C, and even returned money already received from this exchange. It also blocked Israminers from purchasing mining hardware and told the company that it had 30 days to close its account.
Israminers had been a customer of the bank for three months before this happened.
One of the founders of Israminers is a lawyer called Guy Penn, of law firm Penn & Co. He filed an injunction against the bank at a Tel Aviv court and a request to temporarily halt the account restrictions, as well as a complaint against the bank supervisor.
Penn shared the details of the case in a post on Facebook. He said that a temporary order has now been granted and the company's account is functioning as usual. He wrote (translated): "In my humble opinion, we cannot fold [when standing] against the Israeli banking system!!!!"
He told Bitcoin.com: “Banks in Israel are currently refusing services to companies that operate in the crypto field, without even checking or understanding their business activity. The banks’ overwhelming refusal leaves us with no choice but to take our case to the courts of law, otherwise the entire Israeli crypto field will have to relocate its business model abroad.”
Bank Hapoalim
In the first case, Shalom and Lior Simon (father and son) successfully gained a temporary injunction against Bank Hapoalim, Israel's largest bank, because on the 14th of March the bank refused to accept a transfer of $195,488 to their account.
The plaintiffs made the money by selling bitcoins. Despite the fact that they reported the receipt to the tax authority, and that they had extensive documentation tracking the passage of their money, the bank refused to accept it citing the risk of money laundering/terror financing which some believe to be inherent to cryptocurrency.
Israeli law states that banks have an obligation to provide banking services unless they have a reasonable reason to refuse to do so.
The Simons brought the case to a Tel Aviv court. Judge Limor Bibi ruled that the bank's fear of money laundering was baseless in the context of this case because the money came from a single transaction which was fully documented.
The bank was ordered to accept the money. Interestingly, a gag order was requested by the bank and denied.
Yair Mesalem of Doron, Tikotzky, Kantor, Gutman & Amit Gross Law Office, which handled the case for the plaintiffs, said to Finance Magnates that such actions by Israeli banks are motivated by their realisation that the development of a peer to peer economy will hurt their business model.
Advs Eli Doron, Assaf Gershgoren and Amit Moshe Cohen wrote in the law firm's blog: "This is an important precedent that obliges the banking system as a whole to reconsider its policy regarding funds originating in virtual currency transactions, while conducting a real and relevant examination of each ad hoc transaction, rather than automatically revoking each transaction without examining it on its merits."
Bits of Gold
The courts are acting on the precedent set by a court case involving Bank Leumi and a company called Bits of Gold. In February of this year, the Israeli Supreme Court ruled that the bank could not refuse the cryptocurrency exchange service on the basis of its inability to check for illegal activity. It issued a temporary order prohibiting the action.
The bank had blocked the accounts of cryptocurrency exchanges from receiving money and claimed that the decision was in line with the Bank of Israel - in fact, it had been going by guidelines written for gambling websites.
This set a precedent for temporary injunctions in cases of discrimination against companies, but not individuals. Today's news regarding Bank Hapoalim takes the precedent one step further.
Israeli courts have ruled against Israeli banks in two cases concerning cryptocurrency this week.
Union Bank
A lawsuit was initiated yesterday against Union Bank, the sixth largest bank in Israel, by a Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term mining company called Israminers.
Reportedly, the bank unilaterally decided to block the firm's account from receiving money from a Bitcoin Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term called BIT2C, and even returned money already received from this exchange. It also blocked Israminers from purchasing mining hardware and told the company that it had 30 days to close its account.
Israminers had been a customer of the bank for three months before this happened.
One of the founders of Israminers is a lawyer called Guy Penn, of law firm Penn & Co. He filed an injunction against the bank at a Tel Aviv court and a request to temporarily halt the account restrictions, as well as a complaint against the bank supervisor.
Penn shared the details of the case in a post on Facebook. He said that a temporary order has now been granted and the company's account is functioning as usual. He wrote (translated): "In my humble opinion, we cannot fold [when standing] against the Israeli banking system!!!!"
He told Bitcoin.com: “Banks in Israel are currently refusing services to companies that operate in the crypto field, without even checking or understanding their business activity. The banks’ overwhelming refusal leaves us with no choice but to take our case to the courts of law, otherwise the entire Israeli crypto field will have to relocate its business model abroad.”
Bank Hapoalim
In the first case, Shalom and Lior Simon (father and son) successfully gained a temporary injunction against Bank Hapoalim, Israel's largest bank, because on the 14th of March the bank refused to accept a transfer of $195,488 to their account.
The plaintiffs made the money by selling bitcoins. Despite the fact that they reported the receipt to the tax authority, and that they had extensive documentation tracking the passage of their money, the bank refused to accept it citing the risk of money laundering/terror financing which some believe to be inherent to cryptocurrency.
Israeli law states that banks have an obligation to provide banking services unless they have a reasonable reason to refuse to do so.
The Simons brought the case to a Tel Aviv court. Judge Limor Bibi ruled that the bank's fear of money laundering was baseless in the context of this case because the money came from a single transaction which was fully documented.
The bank was ordered to accept the money. Interestingly, a gag order was requested by the bank and denied.
Yair Mesalem of Doron, Tikotzky, Kantor, Gutman & Amit Gross Law Office, which handled the case for the plaintiffs, said to Finance Magnates that such actions by Israeli banks are motivated by their realisation that the development of a peer to peer economy will hurt their business model.
Advs Eli Doron, Assaf Gershgoren and Amit Moshe Cohen wrote in the law firm's blog: "This is an important precedent that obliges the banking system as a whole to reconsider its policy regarding funds originating in virtual currency transactions, while conducting a real and relevant examination of each ad hoc transaction, rather than automatically revoking each transaction without examining it on its merits."
Bits of Gold
The courts are acting on the precedent set by a court case involving Bank Leumi and a company called Bits of Gold. In February of this year, the Israeli Supreme Court ruled that the bank could not refuse the cryptocurrency exchange service on the basis of its inability to check for illegal activity. It issued a temporary order prohibiting the action.
The bank had blocked the accounts of cryptocurrency exchanges from receiving money and claimed that the decision was in line with the Bank of Israel - in fact, it had been going by guidelines written for gambling websites.
This set a precedent for temporary injunctions in cases of discrimination against companies, but not individuals. Today's news regarding Bank Hapoalim takes the precedent one step further.