Israeli supreme court rules in support of cyber currencies

Cyber currency supporters in Israel had encouraging news Tuesday after the Israeli Supreme Court issued a temporary court order to the major financial company Leumi Bank, requiring it to allow trading in cyber currencies, and discontinue its practice of limiting the accounts of firms associated with the burgeoning sector.

Readers should however note at the outset that the order is temporary, and the situation could change with the introduction of new information or court actions.

The case has its origins in the bank’s decision to halt all Bits of Gold cyber currency transactions last year on grounds that it was unable to meet its anti-money laundering obligations due to the anonymous nature of cyber currency transactions.

The bank – Israeli’s second largest – was lambasted by cyber currency supporters for its actions, which came at a point when cryptocurrencies like Bitcoin were riding high and there was a strong demand for transactional activity, but Leumi remained adamant that it was complying with national bank of Israel regulatory restrictions against online gambling transactions using cyber currencies.

Leumi had allegedly classified the Bits of Gold transactions as involving gambling, thereby justifying the imposition of blocks.

Bits of Gold CEO Yuval Roasch responded to the Supreme Court order by issuing a statement in which he said:

“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.”

Leumi Bank had not commented on the Supreme Court decision when we went to press Thursday morning.

In related but separate news, US computer technology billionaire Bill Gates and US Deputy Attorney General Rod Rosenstein expressed their continuing reservations about cyber currency trading and its use in business.

Gates, addressing a discussion panel on Reddit Tuesday, said:

“The main feature of crypto currencies is their anonymity. I don’t think this is a good thing. The Governments ability to find money laundering and tax evasion and terrorist funding is a good thing. Right now crypto currencies are used for buying fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way. I think the speculative wave around ICOs and crypto currencies is super risky for those who go long.”

Rosenstein commented during an American bankers caucus that cryptocurrencies constitute a new challenge in the financial sector, one which the federal US government planned on “tending to” soon.

“A new challenge we face of course is cryptocurrency, because a lot of these schemes involve Bitcoin and other cryptocurrencies, which do not flow through the traditional financial systems. So what we’re working on now with our cybercrimes task force within the department is an effort to develop a compressive strategy to deal with that,” he said.

Related and similar