Israeli Court Rebuffs Union Bank’s Blanket Ban On Crypto Accounts

Earlier this week, a court in Israel ruled against the Union Bank of Israel’s policy that prohibits participants in the cryptocurrency industry from opening bank accounts, according to Israeli news outlet Calcalist.

Per the article, Tel Aviv District Court Judge Limor Bibi ruled that the bank did not have reasonable cause to close the account of Ukrainian mining company Yashraminer. However, the judge also ruled that the bank has the right to refuse to deposit money made by converting crypto into fiat.

The case was brought before the Israeli court last year when the bank refused to receive the company’s receipts and closed its account. These actions were apparently due to the bank’s “sweeping policy, which completely prohibits the opening of an account for a customer engaged in digital currencies.”

According to the Calcalist, the bank announced this policy to the Supervisor of Banks – the government organization that oversees the banking industry – in 2014 and was told the policy posed no legal issues. The Union Bank feels this policy is reasonable considering the potential of cryptocurrency to be used by criminals to launder money.

Judge Bibi stated, “I believe that the sweeping policy, which does not distinguish between different types of activity, scope of activity and different types of customers – in the field of digital currencies – is unreasonable.” The judge maintained that banks have the right to refuse service to those they believe are involved in criminal activities, but cannot simply refuse service because they are engaged in cryptocurrency.

Translations by Google.