A victory against monopolies, but only temporarily. The Israeli Supreme Court has prohibited the bank account closure of a local crypto exchange known as Bits of Gold.
Before ordering a temporary injunction prior to a final hearing of the precedent setting case, which could set an example across the west, the Supreme Court said:
“The decision of the Bank is based on the assumption that the Company’s activity 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.
But 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 the company acted transparently and did not violate any statutory provision.”
In a story familiar to many other blockchain based businesses, Bits of Gold found itself in trouble when Bank Leumi decided to close their bank account in 2014 only because they deal in bitcoin and other cryptos.
Local media says Bits of Gold had a “meticulous conduct” and is regulated. They therefore took their fight to court, with the first instance hearing ruling in favor of the bank, “even though it praised Bits of Gold’s activities,” local media says.
The crypto exchange appealed its decision, with the matter now all the way to the final Supreme Court where remarks that the bank’s concerns were only speculative were made:
“The damages that may be caused to the Bank, insofar as the request is accepted, constitute speculation at this time,” the Supreme Court said.
The injunction however is only temporary until the final decision, which might take some months as the case makes its way through the process.
“This is a precedent-setting decision whose importance can not be overemphasized in relation to the trading of digital currencies,” Shaul Zioni of Philippsdorf Philippe, who represented the company, said.
“The court says banks should not ban the company’s activities sweepingly and that they should manage their risk,” he further added.
A similar situation is found across the world, with London’s FCA accusing banks of blanket banning of blockchain companies, further implying they are behaving in an anti-competitive manner.
We may therefore see similar cases in other jurisdictions as that guarantor of freedom, the rule of law from an independent and impartial judiciary, starts being utilized against a banking cartel that, instead of adapting to the times, acts like luddites.