Israeli banks cannot reject deposits from crypto firms without cause: Court

The Tel Aviv district court Judge in a ruling in favor of an Israeli crypto-mining firm barred the Israeli banks and the National Union of Banks from closing the bank accounts or rejecting payments without cause, local media reported.

The Judge, in this case, Limor Bibi heard the case on the petition of Israminers Ltd. The crypto-mining firm appealed to the court that their bank is trying to close down their account in an action that can be termed, “unlawful”.

Judge Bibi was of the view that the current policy that does not distinguish between various types of cryptocurrency related activities and thus cannot be used as a law in the absence of a law barring cryptocurrency companies from carrying out their business.

The directed the banks not to close the cryptocurrency firm accounts, the banks, however, were of the view that the national policy dictates them to have the know your customer (KYC) policy. In addition, in order to curb money laundering, they have to restrain their operations in the absence of sender details.

Judge Bibi allowed Israeli banks the right to reject any transaction that takes away the banks freedom to take their due diligence measures towards the national policy while barring them from closing cryptocurrency firm accounts without proper grounds.

This ruling may not affect the cryptocurrency firm but is likely to impact the overall cryptocurrency business in the country as cryptocurrency allowing anonymous transactions may not be able to continue their business in Israel.