According to information circulating, the Bank of Israel has instructed local banks to accept profits generated by cryptocurrency activities as long as they are not related to criminal cases. The purpose of this provision is to strengthen anti-money laundering measures.
Central Bank of Israel grants freedom to local banks
According to a recent local report, the central bank of Israel (BCI) distributed a document that deals with money laundering and other financial crimes. In the document, the BCI insisted that it wants to upgrade the rules that are imposed on cryptocurrency companies. Concretely, the BCI asks local banks to do not reject the profits generated by cryptocurrency transactions.
However, not all operations are valid. Indeed, in the document, the BCI established a list of conditions that banks must verify before validating transactions relating to digital assets. They must take into account the nature of the initial funds and the risk classification.
Commenting on this new provision, Ron Tzafrati, vice president of finance and regulation of the Bit2C cryptocurrency exchange, said: “On the one hand, the BCI finally recognizes the obligation of banks to carry out risk assessment and management. On the other hand, it leaves a broad discretion to banks so that they continue to refuse in many cases certain transactions because of the risk of money laundering that they present ”.
The unforgettable case of Esther Freeman
When looking at the new cryptocurrency legislation in Israel, it is worth considering the case of Esther Freeman.
In 2013, this retired Israeli had invested in digital assets with an amount of $ 3,240 in BTC. Eight years later, thanks to the growth in the price of the main cryptocurrency, it multiplied its investment by 100. However, Bank Hapoalim – one of the main banks in the country – had refused to accept the deposit of the $ 324,000. that she had transferred from the cryptocurrency exchange. The bank had estimated that the source of funds could be related to the “Money laundering or terrorist financing”.
In order to gain possession of her funds, Ms Freeman appointed a lawyer and attempted legal action against the bank. In this case, the judges found that the bank did not have the right to restrict the activity of the client’s account solely because it has a connection to cryptocurrencies.
In Israel, the data will change when it comes to cryptocurrencies. Indeed, the country’s central bank has banned local banks from refusing profits generated by their clients’ cryptocurrency investments. Are we moving towards final acceptance of digital assets in the country’s financial sector?
Source: Cryptopotato
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Behind the generic signature “TCT editorial staff” are young journalists and authors with specific profiles who wish to remain anonymous because they are involved in the ecosystem with certain obligations.
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