Tel Aviv Court Backs the Sale of Bitcoin
The banking system in Israel has never been a supporter of bitcoin and other altcoins. It has levied various regulations on digital currencies, but the courts have always denied their actions in every incident. In the latest development, a bank was criticized by the court which did not deal in incoming transfers from an exchange in Tel Aviv.
The largest bank of Israel, Bank Hapoalim, was directed by the district court to accept funds transferred after the sale of bitcoin. The bank denied the incoming transfer of $195,000 in his client’s joint account from a European crypto exchange.
According to the bank, digital currencies come with heavy risks and the institution is concerned about the use of bitcoin in financing terror, money laundering, and other illegal activities. However, Hapoalim had all the necessary documents required for such transactions which also allowed the bank to track the funds from their initial to the ending point. The client of the bank also informed the Israel Tax Authority about the transaction. Even after meeting all the formalities the client was not able to convince the bank about the authenticity of the transaction. Moreover, the bank has also informed that it will be returning the acquired funds within a week.
The two sides confronted each other this Sunday in court, and the bank had to submit. The hearing was lead by Judge Limor Bibi on a request of a temporary injunction. Within the court session, it was acknowledged that the client did not violate any of the AML laws or conducted activities against taxation policies. The bank was ordered to accept the transaction and immediately transfer the funds to client’s account.
On the other hand, the trader was asked to sign an IRS W8 form to admit that he was not linked to the US in any manner. It is evident, also after the previous cases, that banks of Israel are concerned about an impending crackdown by American regulators. Moreover, the court also refused bank’s request to release a gag order in relation to the specific case.
The complainant was represented by the law firm Doron, Tikotzky, Kantor, Gutman & Amit Gross. The prosecutor commented, “Recently, we have witnessed an extreme escalation in the banks’ fight against Bitcoin and the other virtual currencies. In what appears to be a planned policy of targeted assassination, the banks are preventing their customers from returning foreign money originating in virtual currencies to their Israeli accounts, even though the clients wish to declare the movement of the funds and pay their taxes according to the law.”
The firm further stressed upon bank’s role to reconsider its policies towards digital currencies. It advised all the banking institutions to conduct a practical and relevant examination of each transaction that involves virtual coins. The banks have no authority to reject transactions without knowing its merits.
The court’s decision has been welcomed by the crypto community of the country which is feeling a bit handicapped due to the outlook of the financial industry. But, the support from jurisdiction is nothing less than a silver lining for the community.