Israel is a pretty intriguing country when it comes to cryptocurrencies in general. So far, we have not seen any major regulatory actions in that part of the world. That makes it all the more surprising to see the Supreme Court of Israel intervene in a recent spat between one of the country’s banks and a cryptocurrency exchange. The outcome is surprisingly positive and will hopefully set a global precedent.
ISRAEL’S SUPREME COURT INTERVENES IN FAVOR OF CRYPTOCURRENCY
Bits of Gold, an Israeli cryptocurrency exchange, has seen great success over the years. Unfortunately, its bank partner did not see things the same way and decided to block the activity of this cryptocurrency company. It is always unfortunate when things like this happen, although it has almost become the new normal.
This particular incident got a lot of attention because many people think the bank in question is concerned about cryptocurrencies. We have seen major financial entities in the US admit that Bitcoin and altcoins legitimately threaten their business models. It is possible Bank Leumi falls into the same category, although its official statement on the matter suggests otherwise.
According to the bank, it is concerned that Bits of Gold’s business model entails risks which are in violation of current regulation. If anything were to happen to the company or its funds, the bank could be held liable for any ensuing issues. It is only normal that entities such as Bank Leumi wish to avoid negative backlash in this regard. However, blocking a company from performing its day-to-day operations seems a bit severe.
For this reason, the Israeli Supreme Court decided to intervene. While such intervention is rather rare, it shows the government is not sitting by idly when cryptocurrency is a topic of discussion. Big was most people’s surprise when the country’s supreme court ruled in favor of Bits of Gold. Its verdict claims that Bank Leumi cannot extensively block the activity of the company any longer. This outspoken support for the cryptocurrency industry sets a very interesting precedent for the future.
According to the high court, Bits of Gold should “not be banned sweepingly”. Any damages caused to the bank are mainly speculative in nature as of right now, and there is no reason for Bank Leumi to block Bits of Gold’s services any longer. It seems the financial institution made a lot of assumptions without basing their decision on factual evidence. Consequently, it made a hasty decision, which has now been officially overturned by the Supreme Court of Israel. It is a pretty big victory for the cryptocurrency industry as a whole.
For the time being, Bank Leumi says it will respect the court’s decision. However, it will continue to manage the case and keep a very close eye on how things proceed. It is possible the bank may decide to take further action against Bits of Gold or other companies making use of its services until proper cryptocurrency regulation is put in place. This legal gray area will need to be addressed sooner rather than later, although when that will happen exactly is yet unknown.