- The investors are banned from depositing the returns on their digital currency investments.
- Activities in an account controlled by a company involved in bitcoin trading were blocked in February 2018.
Several Bitcoin traders in Israel have already filed cases against the banks of the country. On Monday, the traders lodged a formal petition demanding that the financial industry defines its crypto-asset policy. The crypto investors have been ruled out from depositing the returns on their bitcoin and other digital currency investments by Israel’s banks because of the nation’s rigid laws on money laundering and the funding of terrorism. Israeli business journal, Globes, has reported that in the past few months, the banks have also barred investors who are known to trade crypto assets from opening accounts.
Digital currency investment has advanced a lot in recent years. However, in 2014 the Bank of Israel, the nation’s central bank, in affiliation with the Tax Authority and other regulatory agencies, issued a warning about the threat regarding the use of virtual currency, including fraud and money laundering.
The statement was aimed at financial services providers who said:
“As the use of virtual currencies enables their anonymous transfer, in many cases evading the need to use financial institutions that are subject to an anti-money laundering and terror financing prohibition regime, this is an activity with a high-risk co-efficient in terms of money laundering and terror financing. Therefore, financial institutions must take this into account within the framework of their risk management policy.”
The Israel Bitcoin Association filed the freedom of information petition in the Jerusalem District Court this Monday. The Association demanded that commercial banks should make their policies on the crypto-assets public.
Jonathan Klinger, the legal adviser to the Bitcoin Association, told Globes:
“Under the Banking (Licensing) Law, it is the duty of a bank to state to the Bank of Israel the policy under which it refuses to conduct transactions. We, therefore, contacted the Bank of Israel and asked for this information, but the Bank of Israel did not agree to disclose this policy to us. We, therefore, decided to petition the court to force the Bank of Israel to provide us with a copy of the policy submitted to it by the banks.”
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