Israeli Court Affirms Bank Should Not Have Shut Down Crypto Mining Farm’s Account For Money Laundering
Israeli Court Affirms That Bank Should Not Have Shut Down Mining Farm’s Account
An Israeli court has recently ruled in favor of a Bitcoin mining farm which had its banking account closed down by a local banking institution over concerns of money laundering. As reported by the local business media outlet Calcalist, Israminers sued Bank Igud in May last year after the account was closed down.
According to the crypto mining company, they faced several cash flow problems after the suspension of the account, which they deemed to be illegal. Now, a judge of Tel Aviv has argued that the policies of the bank on cryptos were too broad and that they should not include anything like an automatic rejection of clients without any real proof of money laundering.
The judge Limor Bibi believes that policies which do not distinguish between kinds of activity are set for failure and are unreasonable, so he decided to rule in favor of the mining farm.
However, at the same time, the bank understood that the banks were within their rights to refuse any deposits which came from crypto trades, which seriously sounds like something at least a little bit contradictory.
In any case, banks are often closing down the accounts of companies who are involved with cryptos all over the world. Unfortunately, only sometimes the law actually helps these companies, and they remain without any help most of the time.
While the regulation is still not clear on how banks should be treating crypto-based services, this will probably keep happening. Banks like Barclays and the Union Bank have already shut down accounts, for instance.
Israel is set to have its banks changing how they treat these companies soon, though. A recent recommendation from the securities regulator of the country has stated that banks should start to treat all these companies in a more uniform manner instead of just blocking them as they see fit.
Unfortunately, regulation is not always a good thing when you have a country which happens to be anti-crypto. Some countries, like India, have a really bad relationship between banks and crypto institutions and they were caused the government.
Last year, India enacted the so-called crypto ban, in which the central bank of the country, India Reserve Bank (RBI), has prohibited banks from having a close relationship with companies that offered crypto services.