An Israeli District Court recently ruled that Israeli banks are not obligated to provide financial services to companies whose primary business is trading in cryptocurrencies, such as Bitcoin or Ethereum.
The Court reasoned that banks should not have to assume the risks associated with providing a financial platform to these digital currency businesses when the leading Israeli authorities on the subject, namely the Central Bank, the Securities Authority, and the Anti-Money Laundering and Terror Financing Authority, themselves have been struggling to delineate clear measures to minimize them.
One of the primary risks Israeli authorities and other regulators around the globe noted is the pseudo-anonymous nature of cryptocurrency holdings.
Regulators view the digital token transfer method as a “black box”, low in accountability and virtually impossible to subject to existing anti-money laundering (AML) and anti-terror financing regulations.
The current AML system was originally tailored to address existing centralized financial services systems.
opening bank account, and (b) any transaction within the system, for example, sending money from one bank account to another or use of swift platforms.