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Israeli Supreme Court: Leumi Bank cannot block Crypto Exchange Bits of Gold

Maya Mandz | Jun. 4, 2019
Israeli Supreme Court: Leumi Bank cannot block Crypto Exchange Bits of Gold

4 June 2019 | AtoZ Markets - The Israeli Supreme Court has announced that Leumi Bank cannot block the Israel-based digital currency exchange Bits of Gold account for regulatory reasons. Bits of Gold had previously been unable to access its account after Leumi Bank had restricted access to it, citing regulatory concerns.

Leumi Bank cannot block crypto exchange anymore

The recent Israeli Supreme Court decision regarding Bits of Gold seemingly creates a precedent for Israeli crypto companies for the legitimate use of traditional banking services in the region.

It is also worth to mention, that just a month ago the aforementioned crypto exchange announced its plans on expansion into the international market.

The company also mentioned about launching a service allowing other international applications and exchanges to trade cryptos while relying on the Bits of Gold system to manage compliance, banking, and liquidity infrastructures.

In March 2019, the Israeli Securities Authority issued its final recommendations on cryptocurrency rules for how to maintain a cryptocurrency space in the country. Including in the report, the idea of creating a standard sandbox was voiced.

About Leumi Bank and Bits of Gold interaction in a brief

Notable, that although via Supreme Court decision Leumi Bank cannot block crypto exchange and its account it reportedly maintains its position against the deal with the Bits of Gold.

The litigations between Israel's oldest banking corporation Leumi and one of Israel’s largest Bitcoin brokers Bits of Gold started in 2017.

Back then the Israeli Supreme Court ruled in favor of Leumi in a separate case against Bits of Gold. The bank was able to achieve the restriction of the exchange’s account on the grounds that bitcoin operations (BTC) cannot satisfy the country's requirements to combat money laundering (AML) activities.

Nevertheless, in 2018, Anat Baron, a judge of the Israeli Supreme Court, issued a court order temporarily prohibiting Leumi from blocking the Bits of Gold bank account. Judge Baron noted that there is no reason to continue to block the Bits of Gold account because during the five years of the exchange operations no violations in the AML area were detected by the exchange.

Judge Baron said that there is no reason to continue blocking the Bits of Gold account because, during the five years of the operations, there were no violations on the part of the AML from the crypto exchange side. However, he noted then that the decision to issue a court order did not prevent the bank from carefully studying the behavior of the exchange or following its risk management policy.

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