The Israeli Attorney General, Dr. Avichai Mandelblit, has stated that banks in the country should not stop providing banking services to crypto-related customers and firms despite such recommendations from the Central Bank of Isreal.
Mandelblit is at the mass-media headlines these days because of another major reason – Israel’s Prime Minister Benjamin Netanyahu’s latest investigations.
Banks Should Make Informed Decision
Cryptocurrencies like Bitcoin are anonymous, compared to traditional wire transfers. Thus, they could be used to facilitate money laundering, fraud, terror, and crime financing, the Bank of Israel said in 2018, advising banks to use necessary measures to combat such activities.
Following the Central bank’s recommendation, banks in the country became hostile towards the Israeli crypto industry. They froze the accounts of customers dealing with digital currencies while rejecting deposits from them, a move that led to several court cases last year.
Mandelblit, speaking at the Tel Aviv District Court, noted that financial institutions should not just conclude that all crypto-related businesses are involved in money laundering. Banks must examine each unique case before deciding whether or not to offer services to crypto customers, the Attorney General said.
Mandelblit’s stance was established in the case Jaguar-Gal represented against Mercantile Discount Bank, one of Israel’s major commercial banks, for refusing to authorize a transfer made by BIT2C, the prominent domestic cryptocurrency exchange.
New Era In The Israeli Crypto Bank-ability
According to local media, the AG’s (Attorney General) view is in opposition to the central bank’s guidelines that are accepting the banks’ refusal to serving crypto holders.
When questioned, she said that “Israeli courts, in general, had zero knowledge about cryptocurrency, Bitcoin and blockchain, but this case opens a door connecting the legal system to the new financial technology” Told CryptoPotato, Jaguar-Adva Gal (JAG) – the lawyer who led this case.
JAG added that during the case, she had to educate the court from scratch on Bitcoin, blockchain, its anonymity level, how transfers are made, and the possibility to monitor transactions for users who are not money launderers, terror and crime financers.
JAG believes that this move is the dawn of a new era in the Israeli crypto bank-ability and legal acceptance in terms of adoption.
She thanked the smart Israeli regulators for their braveness, unlike their global colleagues who are afraid to oppose India and other countries’ central banks’ directives.
“I do hope that regulators in other countries will adopt the approach of the Israeli legislator. However, we must note that the Israeli banking law is somewhat different than that of other countries.” According to JAG.
“Israeli law requires banks to serve clients as a default requirement unless major risks associated with AML, terror financing, or tax avoidance. This is not the case in other countries where laws are more capitalistic and based on free trade, giving banks more space and freedom to avoid risks, which are afraid to manage and handle.”