Israeli crypto investors reveal need to make crypto policy public

Chris Lee

A group of Bitcoin traders based in Israel have announced that they will open a court case against some of the country’s banks.

There is an ongoing dispute between the group and a range of financial services companies regarding the policies of the banks relating to cryptocurrencies.

It is understood that a group of crypto traders have been told that they are not permitted to leave their profits on some crypto products in particular banks.

This is due to the strict laws regarding money laundering which exist in Israel, specifically in relation to avoiding the funding of terrorism.

The opinion of the financial services firms was first expressed back in 2014 on behalf of several different institutions, including the Bank of Israel and the country’s tax authorities.

In a statement, the group said that the “anonymous transfer” nature of many crypto coins meant that financial services firms should incorporate this into their “risk management policy”.

“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”, it read.

“Therefore, financial institutions must take this into account within the framework of their risk management policy.”

However, crypto investors who are looking to move their money out of exchanges and wallets and into banks have told the Jerusalem District Court that they want a freedom of information request set up.

The Israel Bitcoin Association, which represents traders in the country, said that it would file the motion.

“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”, said its spokesperson.

It added that it was now taking matters into its own hands.

“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.”

Despite its seemingly draconian laws regarding crypto investments, Israel is a highly technological country.

It has a thriving tech sector which has helped to fuel the crypto boom, and even Prime Minister Benjamin Netanyahu has expressed an opinion that the world’s financial system could be about to change as a result of blockchain.

It has also experienced its fair share of crypto fraud cases in recent times.

This month, an Israeli citizen was sentenced in the US after she was accused of running a binary options scheme which allegedly defrauded people of over a hundred million US dollars.

Lee Elbaz, who was CEO of Yukom Communications, also operated brands known as BigOption and BinaryBook. She was accused of fraud worth $145 million, and other defendants are now also in the pipeline.


Chris Lee

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