Court Ruled in Favor of Bank Leumi
A recent trial in the Tel Aviv district court ruled in favor of a large bank which dropped a bitcoin exchange as a client, despite the exchange following all of the proper anti-money laundering (AML) and know your customer (KYC) requirements.
Also read: Considering Bitcoin An Asset Could Set Back Adoption in Israel
Court Ruled in Favor of Bank Leumi
The Tel Aviv district court reportedly ruled last week against Israeli bitcoin exchange Bits of Gold in favor of Bank Leumi, the country’s second largest bank by total assets.
The case was brought to court by the Tel Aviv-based exchange after it was denied service by the bank. The proceedings followed an incident in which the bank claimed “hackers broke into its accounts in order to send funds from the bank to buy bitcoins,” it told the court. Bits of Gold assisted the bank with the investigations but there was no indication that it was involved in any way, the court learned.
Nonetheless, Bank Leumi told the court that its own cybersecurity issues warranted cause to stop offering banking services to the exchange.
Fear of Cryptocurrency – AML/KYC Not Enough
It was shown in court that Bits of Gold had followed all AML and KYC procedures, which included reporting all transactions larger than a certain amount to the authorities as required by the Israeli law. However, Bank Leumi still claimed that the nature of cryptocurrency renders its AML requirements inadequate since it cannot know whom the end receiver of the cryptocurrency is.
The bank told the court that it fears how criminal organizations can send their “monkeys” to buy bitcoins and transfer them to wallets under their control. Monkeys are “low level people under their control who will never testify against the masterminds,” Finance Magnates explained. The publication relayed the bank’s concern:
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