A cryptocurrency brokerage based in Israel won’t have its bank account closed – for now , anyway- thanks to an intervention by the country’s Supreme Court.
Bits of Gold, which launched its services in 2013, was on the cusp of having its Bank Leumi account cut off on account of its business model, according to a report from The Marker. The issue dates back to last fall when banking officials there reportedly began scrutinizing the accounts held by cryptocurrency users and businesses more closely.
But the Feb. 26 ruling from the Supreme Court – a temporary injunction following an appeal by Bits of Gold – has put off the potential closure until a formal review of the issue can be conducted. In the order, the judge wrote that the concerns expressed by Bank Leumi are merely speculative and that Bits of Gold “acted transparently and did not violate any provision of law” during its years of operation.
The temporary injunction doesn’t necessarily mean that Bits of Gold will keep its banking access, however, and the ruling states that the bank still has the right to scrutinize specific activities related to the account. That said, the outcome and the nature of the ruling itself has given the startup cause for celebration amidst the uncertainty.
“The court’s decision enables us to focus on the growth of the Israeli cryptocurrency community. We were the first to request for the creation of rules for digital currency trade and the first to comply with those rules and others,” Youval Rouach, CEO at Bits of Gold, said in a statement. “We’ll continue to lead this field in order to give cryptocurrencies their rightful place – as a massive growth engine for the Israeli high tech and fintech industry.”
The developments come as the regulatory picture in Israel around cryptocurrencies gains more clarification as a result of recent government statements. On Feb. 19, the country’s tax office indicated that it would treat bitcoin as a form of property, making any profits realized subject to a capital gains tax.