Israel prohibits banks from limiting crypto activity in landmark Supreme Court decision
The Israeli Supreme Court made a landmark decision prohibiting Leumi Bank from limiting banking activity of accounts of companies associated with the cryptocurrency industry.
The Supreme Court issued a temporary court order preventing Leumi Bank, one of Israel’s largest banks by total assets, from restricting account activity of Tel-Aviv-based crypto exchange Bits of Gold.
The decision is being hailed as a big victory for the cryptocurrency community.
Leumi Bank implemented a block on payments to Bitcoin exchanges last December – when demand for cryptocurrencies spiked and digital currencies across the board soared to record highs.
Leumi Bank said at the time that the block was in line with an order issued by the Bank of Israel. However, the order was reportedly part of confinements put in place for “websites that execute gambling transactions.”
According to local news outlet Globes, Bits of Gold CEO Yuval Roash issued a statement in response to the Supreme Court’s decision:
“The court’s decision enables us to continue to focus on the base of the crypto community in Israel. We were the first to request the creation of rules for the activity of digital currencies and the first to stand by those rules.
“We will continue to lead the industry, in order to give digital currencies their rightful place in the Israeli economy, as an incredible growth engine for the high tech and financial industries.”
Judge Anat Baron, who ruled on the case, said that the court order is “not intended to harm the bank’s rights to analyze with specificity every transaction that takes place with the bank account or to take any actions that are related to minimizing risks, which become transparent through the activities of the company.”
What is a cryptocurrency?
A cryptocurrency is a type of currency that only exists electronically, i.e., it is a digital currency. Cryptocurrencies are ultra secure and remarkably cheap to use for transactions.
Cryptocurrency creators used cryptography to make them secure. Cryptography is the art of creating code and also deciphering code.
This type of digital money stores transaction data in separate records. We call these records blocks. The blocks are linked to each other forming blockchains.
To carry out a successful cyber attack on a cryptocurrency, you must hit every single block in the blockchain simultaneously. That is vastly more difficult than attacking just one place in a centralized system.
Bitcoin, which is the most common cryptocurrency in circulation globally, was also the first cryptocurrency to come onto the market. Bitcoin has been around since 2009.