Despite consistent collaborations with various banks around the world, the blockchain industry has continuously faced the challenge of not being able to open bank accounts and have access to banking services.
Thankfully, this trend might be on the reverse as it was reported on March 17, 2019, that the courts told a Tel Aviv bank that they could not close the accounts of crypto miners without just cause to do so.
This judgment was brought about when Union Bank of Israel, Ltd., one of the largest banks in Israel, was sued by Israminers Ltd., a local crypto mining outfit, for trying to close their business account in what they termed an unlawful act.
After hearing both sides, Judge Limor Bibi ruled that the act was indeed unlawful and that Union Bank of Israel was not allowed to close their account based on a broad policy of disallowing any crypto-related business to open accounts with them.
“I believe that the sweeping policy, which does not distinguish between different types of activity, scope of activity and different types of customers – in the field of digital currencies – is unreasonable,” the Judge said.
While this is a win for Israminers, the bank has been allowed to refuse deposit requests if they are coming from anonymous sources so as to remain in line with Anti-Money Laundering (AML) and Know-Your-Customer (KYC) requirement in place in Israel.
Where Do We Go From Here?
With the ongoing problem of crypto businesses unable to open bank accounts, the industry can expect similar court cases to come in the near future, but not every judge will follow a similar ruling.
The judge’s remark about the bank being in the right to refuse deposits from unknown sources helps to explain the root of these discriminatory acts by banks, which boils down to a lack of trust. Banks are not interested in sorting through the legitimate crypto businesses and the fraudsters and would instead impose a blanket ban on the entire industry.