Israeli Supreme Court prohibits bank account closure of Bits of Gold

Israeli Supreme Court prohibits bank account closure of Bits of Gold

February 28, 2018 Off By Maheen Hernandez

Israeli Supreme Court has ordered a temporary injunction prohibiting  Bank Leumi from closing account of a local crypto exchange known as Bits of Gold.

The prohibition by the Supreme Court is only a temporary one while the case proceed through, but it is definitely a huge positive for crypto exchanges around the world who have been facing blanket bans on speculations that crypto trading and any cryptocurrency related dealings are marred with high risks.

The Supreme Court said that Bank Leumi’s decision of closing the account of Bits of Gold is based on the assumption of high risk involved with the Company’s activity and that they are in violation of the provisions of the law. However, that’s not the case notes Supreme Court citing the five years of operations of the crypto exchange. The court pointed out that the assumed fears haven’t materialized as the District Court has determined the company acted transparently and did not violate any statutory provision.

It all started when Bank Leumi decided to close bank account of Bits of Gold in 2014 because they deal in bitcoin and other cryptos. According to reports in the local media, Bits of Gold had a “meticulous conduct” and is regulated. They therefore took their fight to court, with the first instance hearing ruling in favor of the bank, “even though it praised Bits of Gold’s activities,” local media says.

Bits of Gold decided to appeal against the ruling and now the matter is with the highest court of the country. The Supreme Court said that “the damages that may be caused to the Bank, insofar as the request is accepted, constitute speculation at this time.”

“This is a precedent-setting decision whose importance can not be overemphasized in relation to the trading of digital currencies,” Shaul Zioni of Philippsdorf Philippe, who represented the company, said.

“The court says banks should not ban the company’s activities sweepingly and that they should manage their risk,” he further added.

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