Israeli Investor Sues Bank Hapoalim Over Crypto Deposit Refusal

Class Action Lawsuit Initiated Against Bank Hapoalim

An unnamed investor is taking on Bank Hapoalim with a hefty class action lawsuit, seeking around $22.5 million for alleged discrimination against cryptocurrency investors. According to a report by BlockTV on August 9, the investor intends to expand his litigation to cover other Israeli banks that share Hapoalim’s stance.

The Anti-Crypto Banking Climate in Israel

It’s no secret that Israeli banks have adopted a cautious approach towards cryptocurrencies, preferring to steer clear of the regulatory spotlight that often follows crypto-related entities. Lior Lahav, the investor’s lawyer, argued that banks cannot simply refuse service on these grounds. He emphasized,

“The banks have an obligation under the law to accept money from the clients […] They can check on their clients, do their due diligence, and find out where the money is coming from.”

The Ripple Effect on Investors

Lahav pointed out that this refusal to accept deposits isn’t just a singular issue. With over 70,000 Bitcoin investors in Israel facing similar obstacles, he describes a growing frustration among what he terms “ordinary people investing in a legal activity.” Many individuals are feeling the crunch as their investments in Bitcoin have become a source of unwanted scrutiny.

A Case Study: Ross Gross

To shed light on these struggles, Lahav mentioned Ross Gross—no relation to the unnamed investor. Gross, a Bitcoin enthusiast since 2011, faced Bank Hapoalim’s refusal to accept his deposits, citing crypto trading profits as the problematic source. Since 2017, Gross has been caught in a financial limbo, unable to pay capital gains taxes due to the bank’s actions, leading the tax authority to impose a lien on various assets including his bank account, home, and even scooters. Gross humorously noted,

“The tax authority is aware of the problem, but they say the ball isn’t in their court.”

The Bigger Picture

This lawsuit could be more than just a squabble over funds; it might represent a pivotal moment for cryptocurrency legitimacy in Israel. As investors like Gross and the unnamed individual push back against banking institutions, the outcome may pave the way for clearer regulations surrounding the treatment of cryptocurrency-derived assets. The question remains: will the banks wake up and smell the blockchain?