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The Supreme Court of Israel issued a temporary injunction order on Monday forbidding Bank Leumi from sweepingly halting the account activity of the Bits of Gold bitcoin exchange. This is seen as a major victory in the Israeli cryptocurrency industry that will set a precedent for other bitcoin businesses struggling to get banking services.
Bits of Gold vs. Leumi
Since its inception in 2014, Bits of Gold has, which is licensed as a currency changer business, always held an account with Bank Leumi – one of the top two biggest banks in the country. In 2015, the bank decided to close its account despite the company’s meticulous conduct – only because the company deals in bitcoin, and then Bits of Gold decided to apply to the court for permission to continue using the account.
For several years Bits of Gold worked with an injunction that allowed it to act until a final verdict. A few months ago, the District Court authorized the bank not to allow Bits of Gold to trade in bitcoin, even though it praised its activities.
The company appealed this decision to the Israeli Supreme Court, which immediately issued a temporary injunction, and on Monday passed a temporary order according to which the company can trade digital coins in its account until a ruling is issued on the entire appeal.
The Supreme Court wrote: “It appears that the damages that the bank might incur are mere speculations for now. The decision of the bank is based on the assumption that the company’s activity indeed carries risks that arise in violation of the provisions of the law, and therefore the bank is liable to pay a price for the materialization of those risks. However until now, for more than five years in which the account has been operating, these fears have not materialized – as the District Court has determined that the company acted transparently and did not violate any statutory provision.”
Bank Leumi Not Giving In
“This is a precedent-setting decision whose importance can not be overemphasized in relation to the trading of digital currencies,” said lawyer Shaul Zioni of the legal firm who represented the company. “The court says banks actually can not ban the company’s activities sweepingly and that they should manage their risk.”
Yuval Roash, CEO of Bits of Gold said, “The court’s decision enables us to focus on continuing to establish the crypto community in Israel, and we will continue to lead the field in order to give digital coins the place which they deserve in the Israeli economy – as a tremendous growth engine for hi-tech and the financial industry. ”
Bank Leumi responded: “The bank respects the decion of the court. However, as long as the matter is not regulated by orderly regulatory directives, the bank’s exposure to the client’s activity in bitcoin will be valid – and not only towards the regulators in Israel who are obligated to respect the decisions of the Supreme Court, but also towards foreign regulators who do not consider themselves bound by the decisions of Israeli law. Therefore, as long as no binding legal provisions are determined by the regulator and the relevant parties, the bank will continue to manage the case until the temporary injunction is removed. ”
Should banks be allowed to refuse to open accounts for bitcoin companies? Share your thoughts in the comments section below!
Images courtesy of Shutterstock.
The post Israeli Supreme Court Forbids Bank From Denying Service to Bitcoin Exchange appeared first on Bitcoin News.
A giant Northern European bank, Nordea, has allegedly enacted a company policy which forbids its employees from owning or trading in bitcoin or other cryptocurrencies. The bank’s current executive team have a long history of on-the-record skepticism toward bitcoin.
Also read: Banks in India Block Crypto Accounts
Nordea Bank Allegedly Forbids Employees from Owning Crypto
The once Swedish bank Nordea Bank AB, now headquartered in Finland (home of its largest shareholder) has reportedly forbade all of its employees from owning or trading in bitcoin or other cryptocurrencies. The alleged move might not be a surprise to long-term watchers of the bank and its executive team.
Chairman Björn Wahlroos’ opinions on bitcoin go back to at least 2014, and he lamented then the decentralized currency’s supposed anonymous properties and its lack of inflation — two aspects most enthusiasts cherish. More recently, Nordea’s President and CEO Casper von Koskull dismissed bitcoin altogether, calling it “a joke.”
Mr. von Koskull explained, “If you somehow allow that to live without controls, then, given the billions we spend on financial regulation as a financial system, I mean, I think it’s actually a joke that you then just let something like bitcoin live. I don’t get it – it’s absurd.”
Joke or not, it’s evidently too hot for the bank’s employees. Nordea is listed on three exchanges and has over a thousand brick and mortar branches serving more than a dozen countries. It boasts nearly twenty million customers, retail and corporate, and has another over five million online users. Its market capitalization is nearing half a trillion dollars.
In a tweet, @samisin wrote, “Nordea Bank forbids all their employees (at least in Sweden) to stop owning and trading $ btc and other crypto currency. This applies to secretaries, IT personal, cleaners and any bank staff employed by the company. Is it legal even?” Commenters railed against the notion, citing violations of basic rights.
In some professional circles, such as journalism, it’s often assumed a conflict of interest to own or have financial stake in that which a company or employee is presumed to have objective contact. New York Times writer Nathaniel Popper has outright refused to own bitcoin so as to not appear tainted in his coverage. Famously, JP Morgan Chase through its CEO Jamie Dimon threatened to “fire” anyone even suspected of dabbling in bitcoin. For bitcoiners, however, there is a glaring double standard.
Does Mr. Popper not use fiat currency? And if so, using his ethical logic, wouldn’t that make him biased toward government paper and against bitcoin? It’s easy to get caught in traps like these, especially when it is just a pretense or only perverse virtue signalling. Banks have long fretted about cryptocurrency and its “risky” and “speculative” nature. But even those concerns fall rather flat when one considers deals these same banks are engaged.
For example, Nordea was just involved in what’s known as a “capital relief deal,” which ironically pushes risk on investors (in this case to almost 10 billion USD) in loans. This is also known as “synthetic securitizations,” and they function to lessen the amount of reserves banks must have on hand against losses. Nordea was headlong in the deal until it abruptly pulled out altogether.
“Nordea dropped those plans as it embarks on an overhaul to eliminate 6,000 jobs,” Bloomberg reported. Clearly shredding thousands of jobs goes to the bank’s concern about employee wellbeing.
On the brighter side, those former Nordea employees might now be able to own bitcoin.
What is your experience with banks and crypto? Let us know in the comments below.
Images: Pixabay,Twitter, Nordea.
The post Swedish Bank Allegedly Forbids Employees from Owning Cryptocurrency appeared first on Bitcoin News.