Things seem to be heating up in the Israeli cryptocurrency market, and once again, regulatory policies have taken center stage. Earlier this week, the Israeli Bitcoin Association, a promotion, non-profit body that seeks to enhance cryptocurrency adoption in Israel, petitioned a court in Jerusalem. The Association wanted the Court to demand accountability from banks concerning how digital assets are treated.
News of the petition was first reported on Monday by local news medium Globes. In its report, Globes revealed that the Israeli Bitcoin Association is inquiring why state banks across Israel have refused transactions to the Bank of Israel, the country’s highest banking institution.
The Association has allegedly been refused access to an account by Israeli banks, even though it has explained that it doesn’t engage in Bitcoin trading or any other activity related to the asset class. However, given the fact that the Association’s name has the word “Bitcoin” in it, and the asset itself seems to have gotten a bad wrap from people around, local banks have just chosen not to accommodate it.
Globes added that the Association initially made attempts to reach the Bank of Israel itself for answers, but they were turned away. Facing no other choice, they chose to go to the courts. Now, as Globes reports, the Association has filed a freedom of information petition, asking banks to show what their policies on money coming from digital assets are.
Speaking with Globes, Meni Rosenfeld, the Chairperson of the Bitcoin Association, revealed that their attempts to reach the Bank of Israel on this matter were rebuffed because its Bitcoin policies were industry secrets. Thus, they south legal backing to help them in their bid to get all secrets and bring them to the light.
The news medium also quotes Jonathan Klinger, a legal adviser to the Association, as he explained that all Israeli banks are obligated under the Banking (Licensing) Law to reveal its policies for refusing transactions to the Bank of Israel.
“We, therefore, contacted the Bank of Israel and asked for this information, but the Bank of Israel did not agree to disclose this policy to us. We, therefore, decided to petition the court to force the Bank of Israel to provide us with a copy of the policy submitted to it by the banks,” he said.
The petition is coming at a point when tensions between the country’s cryptocurrency and traditional banking industries seem to have reached fever pitch. Multiple reports have revealed that while forex traders and other traditional financial experts have enjoyed seamless relationships with banks, their counterparts in the crypto industry have continued to struggle.
Some reports even showed that crypto traders have found it difficult to make tax payments, as they can’t even deposit the funds gotten from their crypto-related activities. What makes the situation especially worse is the fact that regulators see to be aware of this problem, but seem not to care much to do something.
Hopefully, a subpoena from members of the crypto community will finally force some answers, and in the long term, some meaningful action to put an end to this bias.