An Israeli cryptocurrency brokerage service involved in a dispute with its bank has been granted a lifeline, following a decision by Israel’s Supreme Court.
Bits of Gold, a brokerage service based in Tel Aviv, had been operating an account with Bank Leumi since the company started operations in 2013. But after the bank flagged their account over concerns about their business model, the broker petitioned for an injunction from the courts to prevent Bank of Leumi from closing their account.
The decision on Tuesday to grant the temporary injunction provided some relief for Bits of Gold, although by no means guarantees their banking position long-term. The judgement noted that banks still have obligations and rights to inspect the bank accounts of their customers, including those operating cryptocurrency businesses.
However, the decision has been welcomed as a cause for celebration by Bits of Gold. The company’s CEO, Youval Rouach, said the decision would allow the company to get back to focusing on its cryptocurrency business.
“The court’s decision enables us to focus on the growth of the Israeli cryptocurrency community. We were the first to request for the creation of rules for digital currency trade and the first to comply with those rules and others…We’ll continue to lead this field in order to give cryptocurrencies their rightful place – as a massive growth engine for the Israeli high tech and fintech industry,” he said.
The issue first arose back in Q3 of 2017, when Israeli banks began stepping up efforts to scrutinise and monitor the activities of businesses in the cryptocurrency sector. This naturally took in brokers like Bits of Gold, and comes at a time of increasing pressure for regulation in Israel, and across the wider world.
Most recently, this has culminated in the decision of the Tax Authority to treat cryptocurrency assets as a form of property, thereby introducing the application of capital gains tax on any profitable disposals.
This comes at a time of increasing clarity over the approach being adopted by lawmakers in Israel, with authorities striving to put together an effect regulatory regime for the emerging cryptocurrency and supporting industries.