After a landmark lawsuit, a court has ruled that Bits of Gold, Israel’s largest cryptocurrency exchange, can continue banking at Bank Leumi.
The bank froze Bits of Gold’s assets after a new classification put crypto in the same category as gambling.
Anti-money laundering laws
Earlier this week the Supreme Court overturned a district court’s prior decision to allow Bank Leumi, Israel’s largest bank, to close the exchange. A previous injunction had expired in February 2018, which had also temporarily stopped Bits of Gold from trading.
The concern at the time was due to the exchange falling foul of anti-money laundering laws, but this was swiftly resolved.
The latest argument, however, focused on the view that trading bitcoin and ethereum on the Hebrew and English language exchange was tantamount to gambling.
Classed as “gambling transactions”
Back in 2018, the Israeli Supreme Court ruled that Bank Leumi could not block account transactions to any cryptocurrency exchanges or, as they described them, “websites that execute gambling transactions.”
The presiding Judge Baron also made reference to no indication of any anti-money laundering allegations over the five years of trading. However, he did note that any court order would not stop the bank from taking an interest in the exchange’s behavior to ensure it complied with all risk management safeguards.
Sets a ruling
Ultimately, the Supreme Court’s latest announcement sets a ruling for other exchanges to gain success in Israel, something that Bits of Gold’s CEO Yuval Roash is keen to do.
He said after the hearing: “This is an exciting moment for us as a company and for the community in general. We worked hard to set up a company that met regulatory requirements, in a new industry, and those efforts paid off. I am proud to be a part of this flourishing industry and push it towards the right regulation.”
Despite the ruling, the bank is still keen to maintain a distance from the exchange but will allow it to continue banking there.
Israel as a country is becoming more accepting of cryptocurrency trading. In March, the Israeli Securities Authority recommended several ways to support the industry in the country. This included the establishment of a regulatory sandbox.
According to CrunchBase, Bits of Gold is the Middle East nation’s largest and most active seller of bitcoin and ethereum. It has more than 50,000 registered customers and grew by 250,000 in 2017 alone. The exchange now has plans to expand into Europe.
