Israeli Court supports crypto company

Cosgrove Gaynard Solicitors

In a recent case in the Supreme Court of Israel, the Court held it was unlawful for Leumi Bank (the “Bank”) to restrict the banking activity of a company engaged in cryptocurrency activities. This precedent should signal a warning to other banks thinking of stifling the growth in cryptocurrencies through anticompetitive actions

In a recent case in the Supreme Court of Israel, the Court held it was unlawful for Leumi Bank (the “Bank”) to restrict the banking activity of a company engaged in cryptocurrency activities.  This precedent should signal a warning to other banks thinking of stifling the growth in cryptocurrencies through anticompetitive actions.

The Supreme Court of Israel overturned an earlier ruling of June 2017 by the district judiciary court in Tel Aviv that had supported the Bank when Bits of Gold (the “Company”) had sought a court order after being denied service by Leumi.  The case argued by the Bank centred around a perceived inability for Bitcoin (“BTC”) transactions to follow Israel’s anti-money laundering laws. The Bank also cited the Israeli law against gambling and instructions from the Bank of Israel as a further justification to block customer payments to BTC exchanges.

Anat Baron J, held, the Bank’s decision to terminate the Company’s account was based on an assumption that violations of the law would take place, however, the lack of any violations over the past five years supports the decision of undoing those restrictions.  The Judge added:

“not intended to harm the bank’s rights to analyse with specificity every transaction that takes place with the bank account or to take any actions that are related to minimizing risks, which become transparent through the activities of the company.”

As more and more Banks admit that cryptocurrencies pose a business risk to traditional banking, it not unreasonable for one to feel that Banks may be using current legislation creatively to ensure they protect their bottom line. Here at Cosgrove Gaynard we are closing monitoring the situation. Should you require advice in this area, please do not hesitate to contact a member of our technology or litigation teams.

All news
Irish Law Awards

Irish law awards 2019

Text Link
Have you suffered an injury onboard an airplane?

Cosgrove Gaynard Solicitors set out what your rights are if you have been injured in the course of air travel.

Text Link
ePrivacy Regulation

A further regulation called the ePrivacy Regulation is being proposed to come into effect next year to further protect privacy in regard to electronic communications.

Text Link
Landmark judgment for the treatment of social media data in German court - digital assets

Landmark case for the inheritance of social media pages and other digital assets.

Text Link