The Israeli based cryptocurrency exchange company, Bits of Gold, received a significant boost on Monday 03/06/2019 when the Israeli Supreme Court made a landmark ruling in its favor in a case it had presented in court. The company was presented by attorney Shaul Zioni of Israel-based law firm Zioni Pillersdorf Phillip. The decision by the Supreme Court allowed the company to continue accessing banking services from Bank Leumi.
Bits of Gold has been licensed as a money exchanger business, and since its establishment in 2014, it has always held an account with Bank Leumi. In 2015, the bank decided to close the company's account on the basis that the company was dealing with crypto-currency trade, which the bank had classified as a form of gambling, hence listing Bits of Gold as a gambling company. Running such a business in the country was considered a violation of the law, and as a result, Bits of Gold would not be allowed to continue using Bank Leumi in its operations.
Since then, Bits of Gold has been working with an injunction awaiting the final ruling by the Supreme Court. But few months before the final verdict was given, a District Court granted a go-ahead to the bank to ban the company from engaging in bitcoin trading activities.
This ruling by a District Court prompted Bits of Gold to hire attorney Shaul Zioni to present them in court in an attempt to contest the decision. In his court presentation, lawyer Shaul Zioni argued that banks had no legal power to regulate companies’ activities sweepingly and that it is the banks’ responsibility to manage their risks. On February 2018, the Supreme Court gave a temporary injunction on the matter, which permitted the company to continue accessing banking services from Bank Leumi, until such a time when the court will give a final verdict on the matter.
The 2019 ruling provided a significant boost to the bitcoin trading business in Israel. Now, Bit of Gold company can continue with its cryptocurrency exchange business using its bank account with Bank Leumi permanently. This decision will also be abiding by any other Israeli bank. Therefore, Bits of Gold or any other bitcoin trading company can open a bank account and access banking services from any bank in Israel without any hindrance.
In its ruling, the Supreme Court noted the damage that Bank Leumi was claiming it would incur from the risks involved in bitcoin trading were mere speculations. The court said that the decision of the bank was inspired by the assumption that this money exchange business carries risks that arise in violation of the provisions of law, hence making the bank liable to pay a cost if these risks materialize. However, the court argued that for more than five years since the Bits of Gold account has been operating, these fears have never materialized. It also noted the finding of the District Court that the company, since its establishment, has never violated any statutory provisions, and it has always acted transparently. Thus, finding no reason why Bank Leumi decided to close its bank account.
Shaul Zioni described the ruling as a precedent-setting decision whose significance cannot be overemphasized concerning the digital currencies trading business in Israel.
The CEO of Bits of Gold Yuval Roash welcomed this landmark victorious ruling and described it as an exciting moment for his company. He said he was glad that they could now focus on establishing a strong crypto community in Israel and continue to lead the country in giving digital currency its rightful place in Israel's economy.
The bank of Leumi, though objected to the ruling, it considered it biding and promised to obey it. It acknowledged that the court's decision allowed the companies to engage in digital currency exchange businesses to continue accessing banking services from Israeli banks.
About Shaul Zioni
Shaul Zioni is an attorney specialized in commercial litigation, arbitration, labor law, class action, tender, antitrust, commercial and corporate law, and administrative law.
Shaul Zioni holds a master's degree in law (LLM) from Columbia University in New York and a bachelor's degree in law (LLB) from the College of Management. He is a member of the Israel Bar Association since 2003 and a member of the New York State Bar Association since 2005. His practice includes presenting legal entities like corporations before government agencies and legal disputes relating to commercial laws as well as class action litigation.
About Zioni Pillersdorf Phillip company
It is a boutique law firm located in Tel Aviv. It is specialized in corporate law, complex litigation with more concentration on tech, fint ech, and medical malpractice. The firm advises and represents clients, financial institutions, high tech companies, and investors on a wide range of legal matters as well as providing presentations on complex litigation cases. The firm provides its clients with competent and effective legal solutions that will help to make a sincere contribution to its clients' business endeavors.
