Supreme Court Stops Bank From Denying Service To Bitcoin Exchange

Israeli Supreme Court Forbids Bank From Halting Account Activity To Bitcoin Exchange

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  • Israeli Supreme Court Ruling Favors Bits of Gold Bitcoin exchange
  • The court forbids Bank Leumi from denying service to the Bitcoin exchange.

Israel: Israeli Supreme Court on Monday issued a temporary restriction order prohibiting Bank Leumi, one of the Israeli top two biggest banks, from discontinuing the account activities of the Bits of Gold bitcoin exchange. This seems as a major victory for the Israeli cryptocurrency industry that will set a standard for other bitcoin companies struggling with banking services.

Also Read: Bangkok Bank Suspends Account of Thai Digital Asset Exchange (TDAX)

Since it began operation in 2014, Bits of Gold Bitcoin exchange has always held an account with Bank Leumi. However, in 2015, the Bank Leumi decided to close down account activities of the exchange despite the meticulous conduct of the exchange, claiming the exchange deals in bitcoin. Then Bits of Gold Bitcoin exchange decided to approach the court for permission to continue with using the account.

For some years, the exchange worked with a ruling that allowed it to act until a final verdict. Few months ago, the District Court approved Bank Leumi to disallow the exchange to trade in bitcoin, even though it commended its activities.

Bits of Gold appealed this decision to the Supreme Court of Israel, which immediately issued a temporary injunction, and on Monday passed a temporary order which allows the exchange to trade digital coins in its account until a ruling is issued on the entire appeal.

The Supreme Court wrote:

“It appears that the damages that the bank might incur are mere speculations for now. The decision of the bank is based on the assumption that the company’s activity indeed carries risks that arise in violation of the provisions of the law, and therefore the bank is liable to pay a price for the materialization of those risks. However until now, for more than five years in which the account has been operating, these fears have not materialized – as the District Court has determined that the company acted transparently and did not violate any statutory provision.”

The CEO of Bits of Gold, Yuval Roash, said:

“The court’s decision enables us to focus on continuing to establish the crypto community in Israel, and we will continue to lead the field in order to give digital coins the place which they deserve in the Israeli economy – as a tremendous growth engine for hi-tech and the financial industry.”

And Bank Leumi responded:

“The bank respects the decision of the court. However, as long as the matter is not regulated by orderly regulatory directives, the bank’s exposure to the client’s activity in bitcoin will be valid – and not only towards the regulators in Israel who are obligated to respect the decisions of the Supreme Court, but also towards foreign regulators who do not consider themselves bound by the decisions of Israeli law. Therefore, as long as no binding legal provisions are determined by the regulator and the relevant parties, the bank will continue to manage the case until the temporary injunction is removed.”

In your own opinion, should financial institutions be allowed to deny services to crypto-related companies? Tell us in the comments box below.

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