Israel: Court asks Union Bank to remove blanket ban on Crypto accounts

A court in Israel ruled against the Union Bank of Israel’s policy to prevent participants in the crypto industry from opening bank accounts.

According to an article by Israeli news outlet Calcalist, the Tel Aviv District Court Judge Limor Bibi ruled that the bank did not have a reasonable cause to close the account of a Ukrainian mining company Yashraminer. But the ruling also stated that the bank has the right to refuse to deposit money that was converted from crypto to fiat.

The bank has refused to receive the company’s receipts and closed its account, following which the case was brought before the Israeli court last year. The bank’s ‘sweeping policy completely prohibits the opening of an account for a customer engaged in digital currencies.’

The policy was announced by the bank to the Supervisor of banks in 2014 and was told that the policy posed no legal issues. This policy is reasonable according to the Union Bank considering the potential of cryptocurrencies to be used by criminals to launder money.

According to Judge Bibi, “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.”

He maintained that, while the banks have the right to refuse serive to those they believe are involved in criminal activities, they cannot simply refuse the service because they are engaged in cryptocurrency.

Security, as a concern, is of utmost importance to the country of Israel and has been that way since its creation in 1948. The country has been in state of conflict with its neighbors, particularly Palestine, and has had to deal with insurgencies and the hostility of the Arab nations surrounding it. Due to certain scams and fraudulent activities associated with the use of cryptocurrencies (especially by criminals and anti-social elements), it only seems natural that the nation would take a defensive stance when it comes to the security of any kind, especially financial security in the nation.

Having said that, Israel is a pro-Blockchain nation and doesn’t have prohibitions against the buying and selling of cryptocurrencies.

This article was originally sourced from ETHNews.

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