A headline on a surprising scale has emerged today in the battle between the banks and the cryptocurrency: The Israeli Supreme Court prohibits the bank from denying service to Bitcoin Exchanges. This means that the Bank of Israel had announced that it had nothing to do with Bitcoins and therefore forbids users to exchange their cryptocurrencies for FIAT money. This radical approach has not pleased the Supreme Court and made clear to the Israeli bank that it should allow the exchange at any time. Israel is breaking the lance in favor of the cryptocurrency, which in turn can become a precedent to open all barriers for Bitcoin users in the future.
The Supreme Court issued an interim injunction yesterday prohibiting Israeli bank Leumi from stifling account activity for the exchange of bitcoins. A big victory against the bank. Since its founding in 2014, "Bits of Gold", an exchanger from Israel, has always used the services of the "Bank Luemi", but the bank account should now be closed, as "Bits of Gold" is trading bitcoins and that would not be longer portable.
"Bits of Gold" then turned directly to the Supreme Court and submitted an appeal. The court immediately recognized that it was not economically viable to allow the exchange of bitcoins into FIAT money and vice versa for years, and then suddenly ban it. The injunction has now caused the bank "Luemi" to reopen the gates for the Exchange portal "Bits of Gold".
The Tribunal explains: "This is a precedent-setting decision whose importance can not be overemphasized in relation to the trading of digital currencies,” said the lawyer Shaul Zioni of the legal firm who represented the company. "The court says, banks actually can not ban the company’s activities sweepingly and that they should manage their risk.”
Bank Leumi responded: “The bank respects the decion 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. ”
But the bank "Leumi" does not give in! She probably has her instructions to see to it that the cryptocurrencies are blocked with stones. The bank is still trying to intervene, but it is unlikely that it will be possible to oppose this decision of the Court.
Bank "Leumi" responded: "The Bank respects the decision of the court, and as long as no binding legislation is passed by the regulator, the bank will continue the case until the injunction is lifted."