Israminers, an Israeli Bitcoin (BTC) mining company sued Bank Igud (the Union Bank of Israel Ltd.) in May 2018 and seems like the Israeli court ruled in favor of the mining company after the bank shut down the company’s accounts over money laundering concerns. The crypto news and business outlet Calcalist reported the developments just yesterday.
Israminers faced a lot of problems with cash flow after the bank blocked the company’s deposits after claiming that the deposits are against the terms of the bank. A long appeal process followed and a Tel Aviv district court judge explained that the policy of the bank on cryptocurrency clients is way too broad and should not include automatic rejections.
Limor Bibi who is the judge in the case was quoted saying:
“I believe that the sweeping policy, which does not distinguish between different types of activity, the scope of activity and different types of customers — in the field of digital currencies — is unreasonable.’’
At the same time, Bibi explained that the banks have a right to refuse deposits that originate from cryptocurrency trades. However, the process continued and the regulatory attitude towards crypto trading showed the impacts on the legacy banking system. As previously reported, multiple banks claimed that they have issues with servicing private investors or small business who trade cryptocurrency.
Banks usually have a hostile stance on cryptocurrency but their actions are quite contradictive.
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For example, The United Kingdom Barclays bank also shut down multiple accounts after developing a relationship with a few crypto exchange giants including Coinbase in order to speed up deposits and withdrawals.
The Union Bank, on the other hand, appears that senior executives have benefited a lot from education in the blockchain sector when the local Bit2c startup held a seminar on its projects and developments in November 2018.
At the start of March, a committee from Israel’s securities regulator officially issued a paper on recommendations for governing the economy around cryptocurrency which can help the bank to improve their treatment on crypto investments more uniformly in the future.
The report noted:
“The committee recommends considering adjustment of the existing regulation to create more suitable regulatory infrastructure for this trading activity in order to better cope with the risks incurred in this activity.’’
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