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Bitcoin traders in Israel fight bank lockouts with petition, lawsuits

The Israel Bitcoin Association means business

Israel‘s Bitcoin BTC fans have formally lodged a petition that demands the nation’s banks disclose internal policies for dealing with proceeds of cryptocurrency trading, Globes reports.

The move follows a series of lawsuits filed against financial institutions that refuse to accept money generated by selling digital currency such as Bitcoin.

Israel‘s banks have even reportedly blocked cryptocurrency traders from opening accounts altogether. The Israel Bitcoin Association told reporters that the Bank of Israel (the nation’s central bank) had even declined a previous request to publish its official policy for digital currency, referring to those details as “commercial secrets.”

“In recent months, we have instituted action to obtain the policy of each commercial bank on deposits originating in cryptocurrency. We feel that there is a general policy of refusing to accept money, but the regulator is not helping us to obtain this policy,” Bitcoin Association legal adviser Adv. Jonathon Klinger told Globes.

Bitcoin traders are also lodging lawsuits

In addition to the freedom of information filing, the Israel Bitcoin Association is funding a “legal proceeding” to force local institution Union Bank of Israel to accept a customer deposit of money earned by selling Bitcoin.

The petition reportedly states: “The bank did not conduct an examination of the petitioner’s specific circumstances. As far as the bank is concerned, the fact that the money came from the sale of bitcoin is enough to rule out in advance the option of depositing it in the petitioner’s account.”

Even worse, the Bank of Israel is reportedly yet to allow the Association operate its own bank account, despite the group being purely focused on promoting cryptocurrency tech, not buying or selling it.

According to the Association, the reason for the continued refusal is because the word “Bitcoin” appears in its name.

Earlier this month, local outlet Haaretz reported that the nation’s tax authority has so far been unable to collect 300 million shekels ($85 million) in unpaid taxes generated by the sale of Bitcoin and other digital currency  and it’s because Bitcoin fans are effectively locked out of the banking system altogether.

This problem has affected Bitcoiners (and their families) in the US, too. Last year, an executive of a hedge fund that invests in the cryptocurrency space claimed Bank of America had closed his three-year-old daughter’s account due to her “connection” to the industry, citing her allegedly dangerous “risk profile.”

Published August 19, 2019 — 16:19 UTC