In January, a newly created virtual currency exchange company located in Israel, have been disallowed to open accounts by every bank in the Jewish state. This, in turn, has led to the company using all the banks collectively. The virtual currency exchange would not be operational, without a bank account. This is due to the fact that fiat transfers from customers cannot be obtained by the company legally in an absence of a bank account.
The bank Gang?
On Sunday, the Tel Aviv District Court has been asked to order all 11 banks located in the Jewish state to open a current account without credit for it by Bitflash LTD. Bitflash ltd is firm operating in Israel with the main purpose of offering virtual currency trading services based in Acre. The firm argues that the banks’ denial to open an account is against the law and indicates the “lack of good faith” because certain banks do open accounts for businesses venturing in a similar field.
According to Bitcoin.com, the lawsuit position is that “….”
However, in the case of Bits of Gold vs. Leumi last year, the court made a ruling that a bank can deny its services to a bitcoin exchange. Notwithstanding, the company may convince the court that the banks are acting collectively to hinder the progression of the virtual currency sector, rather than using them on an individual basis.
“No!!” to virtual currency by all Banks
Over a month ago, since its inception, Bitflash claimed to have advanced a couple of banking outlets with the purpose of opening a bank account, but they have been denied in all occasion due to branch managers disliking of virtual currency business.
The firm was told outright in some of the banking outlets that “the bank’s policy is not to open accounts for those who deal with digital currencies, regardless of the nature of the business.”
In addition, the company stressed that it would not need a credit, its accounts will continuously have a positive balance and only a current account is needed to allow money transfer from clients residing in Israel to its account, according to the plaintiff, through its attorney Alon Huberman.
Certain banks have defended themselves for the denial of current account opening, stating that source of funds deposited in the company’s account would be untraceable. However, in efforts to eradicate this mistrust, the company stated that the account is meant to be used only to transfer funds from individuals and entities that are banking with the same bank but even after this was disclosed, the banks still denied them.