The Israel Bitcoin Association, a nonprofit organization that promotes the use of Bitcoin (BTC)
and cryptocurrencies, has reportedly filed a freedom of information
petition with a Jerusalem court. The petition purportedly seeks to
require local banks to disclose their policies on money originating from
digital currencies.
Local news daily Globes reported
on Aug. 19 that state banks are required to report reasons for refusing
transactions to the country’s central bank, the Bank of Israel. The
association previously reached out to Bank of Israel, asking for
clarification on the cryptocurrency policies of commercial banks, but
were reportedly refused.
Association chairman Meni
Rosenfeld told Globes that the Bank of Israel recently refused the
association’s request on the grounds that these are industry secrets.
This apparently motivated the association to move forward with a legal
petition to make the disclosure mandatory. Israel Bitcoin Association
legal adviser Jonathan Klinger said:
"Under
the Banking (Licensing) Law, it is the duty of a bank to state to the
Bank of Israel the policy under which it refuses to conduct
transactions. We therefore contacted the Bank of Israel and asked for
this information, but the Bank of Israel did not agree to disclose this
policy to us. We therefore decided to petition the court to force the
Bank of Israel to provide us with a copy of the policy submitted to it
by the banks.”
Israeli banks have
reportedly denied the Israel Bitcoin Association the ability to open an
account, even though the association does not buy or sell digital
currency. The report notes that this is likely due to the association’s
name, which includes the word Bitcoin.
Tax troubles and class action against Bank Hapoalim
Other
traders and crypto-related businesses in Israel have experienced
difficulties making deposits and remaining tax-compliant due to
crypto-averse banking policies. According to some reports, cryptocurrency traders cannot pay taxes as they are unable to make deposits of funds obtained through cryptocurrencies.
The
tax authority is reportedly aware of the problem, but does not act as,
according to local BTC investor Ron Gross: “the ball is not in their
court.”
Additionally, a cryptocurrency investor has
filed a class action suit against the Israeli Bank Hapoalim, on the
grounds that they will not accept money earned via BTC investments. As
previously reported by Cointelegraph, the complainant’s lawyer, Lior Lahav, has argued:
“The
banks have an obligation under the law to accept money from the clients
[...] They can check on their clients, do their due diligence, and find
out where the money is coming from. The problem with the banks is that
they are doing nothing. They are not asking their clients: ‘Provide me
documentation of the origin of the money.'”
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