One of the challenges that crypto users and businesses face worldwide is the fact that several countries have not put proper regulations in place to monitor the crypto industry and this leaves them at a disadvantage. An example of this is the fact that many within the crypto industry are refused banking services and this has led to several businesses needing to shut down altogether and crypto users finding it difficult to make use of their funds.
In Israel, an organization called the Israel Bitcoin Association which works to promote the use of Bitcoin and other cryptos has filed a freedom of information position with a Jerusalem Court. According to an August 19, 2019, report, the petition seeks to require local banks to disclose their current policies on money that originates from digital currencies.
According to the report, the petition will require banks to report whatever reason they have for refusing transactions to the bank of Israel. The association had previously reached out to the Bank of Israel for this but were refused. The reason for this refusal of request is because the information is apparently industry secret according to Meni Rosenfeld, who is the association chairman. This rejection led the organization to move forward with a legal petition that will make the disclosure of such policies mandatory.
“Under the Banking (Licensing) Law, it is the duty of a bank to state to the Bank of Israel the policy under which it refuses to conduct transactions. We therefore contacted the Bank of Israel and asked for this information, but the Bank of Israel did not agree to disclose this policy to us. We therefore decided to petition the court to force the Bank of Israel to provide us with a copy of the policy submitted to it by the banks,” said Israel Bitcoin Association legal adviser Jonathan Klinger.
This is a common frustration that is felt by the crypto industry worldwide as at times the problem is not just the lack of regulation but the lack of clarity and information that is readily available.
Allegedly, the Bitcoin Association itself has been denied the ability to open an account within Israel even though they do not take part in any trading of digital currency. They believe that the reason for this is their name which includes the word ‘Bitcoin’ which is too closely associated with the cryptocurrency industry. This lack of banking services has caused a ripple effect in which traders and those involved in the crypto industry in Israel struggle to make a deposit or pay their taxes. The tax authority within Israel has been made aware of the problem but unable to act on it because it is not their area of expertise or jurisdiction.