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Tel Aviv Court Rules Bank Can’t Close Crypto Miner’s Account

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A court in Israel has once again ruled against a local bank which tried to close the account of a cryptocurrency related business without any due cause. This time a Tel Aviv court has determined that a bank can’t refuse to operate an account on behalf of a crypto miner.

Also Read: Tel Aviv Court Gives Moshe Hogeg 30 Days to Settle $4M Lawsuit

Court Rules on Israminers vs Union Bank

Union Bank of Israel, Ltd. (TASE: UNON), the sixth largest Israeli bank, will not be allowed to close the account of local cryptocurrency mining company Israminers Ltd. Tel Aviv District Court Judge Limor Bibi has ruled that the bank’s sweeping policy of prohibiting the opening of an account for any customer working with digital currencies is unreasonable. However, the bank could still refuse the company’s requests to deposit fiat money if it is coming from anonymous exchanges in order to remain in compliance with the banking system’s AML (anti-money laundering) and KYC (know your customer) legal requirements.

Tel Aviv Court Rules Bank Can’t Close Crypto Miner’s Account

The judge ruled: “I believe that the sweeping policy, which does not distinguish between different types of activity, scope of activity and different types of customers – in the field of digital currencies – is unreasonable.” However, she added that “In these circumstances, I find the bank’s argument that, given that the ‘money trail’, as defined, in terms of sales in a trading arena to an unknown factor which knowledge of it haven’t been proven, creates risks of money laundering. As a result, I find the bank’s refusal to provide service with regard to the receipt of the money deposited in the account as reasonable.”

Repeated Precedence

The Israeli banking system has repeatedly had to be told by the courts not to block crypto businesses and users without justifiable reasons. In May 2018, for example, Bank Hapoalim, Israel’s largest bank, was forced by the same Tel Aviv District Court judge to accept a transfer of funds resulting from the sale of bitcoin to a client who had documents tracking the trade from beginning to end.

Tel Aviv Court Rules Bank Can’t Close Crypto Miner’s Account

In February 2018, the Supreme Court of Israel issued an injunction order forbidding Bank Leumi from sweepingly halting the account activity of the Bits of Gold bitcoin exchange.

What do you think about this court’s ruling? Share your thoughts in the comments section below.


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Bank of Mexico’s Attempt to Regulate Crypto ‘Is a Disaster,’ Exchange CEO Explains

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The long-awaited rules on crypto assets recently published by the central bank of Mexico have caused quite a stir. A local cryptocurrency exchange’s CEO explains to news.Bitcoin.com that “the impact goes beyond the crypto industry.” Calling it “a disaster,” he asserts that the people within the central bank “have really shown their ignorance” about cryptocurrency.

Also read: Mexico’s Central Bank Publishes ‘Catch-22’ Rules Impacting Crypto Exchanges

Central Bank Showing Ignorance

Much discussion has transpired after the Bank of Mexico (Banxico), the country’s central bank, published a circular detailing crypto-related provisions for the regulation of financial technology institutions (FTIs).

Sebastian Acosta Checa, CEO of local crypto exchange Isbit, shared with news.Bitcoin.com that the circular “says FTIs have to prevent consumers from being ‘exposed’ to the terrible ‘dangerous’ nature of virtual assets on the grounds of their ‘volatility’ and ‘complexity.’” Overall, noting that “In a way, it [Banxico’s circular] is preventing institutions from offering virtual assets to end consumers,” he remarked:

This is a disaster. The people within Banxico have really shown their ignorance about the subject they are trying to regulate.

Bank of Mexico's Attempt to Regulate Crypto Is a Disaster, Exchange CEO Explains

Mexico’s congress passed a law to regulate fintech companies in March last year, putting Banxico in charge of determining which cryptocurrencies would be authorized to offer to the public by regulated entities. At the time, the crypto community and stakeholders were hopeful that the central bank would introduce positive regulations to foster the fintech sector and the country’s economy as a whole.

However, when Banxico finally published the circular, it “essentially stipulated that they wouldn’t authorize any cryptocurrency to be offered by regulated financial companies,” Tomas Alvarez, CEO of local crypto exchange Volabit, recently told news.Bitcoin.com.

Restriction But Not Prohibition

Mexican crypto exchange Bitso described in a blog post that “the circular is directed at banks and fintech [companies] regarding their operations with cryptocurrencies.” The exchange noted that “Banxico mentions that it seeks to take advantage of the use of the technology of these cryptocurrencies as long as they are used for internal operations of financial institutions,” emphasizing:

This does not mean that operations with cryptocurrencies are prohibited.

Bank of Mexico's Attempt to Regulate Crypto Is a Disaster, Exchange CEO Explains

Alvarez calls it a catch-22 situation since the law requires crypto exchanges to become regulated financial institutions. “However, once you obtain this license you would not have the authorization to list any cryptocurrencies, making it legally impossible to operate an exchange in Mexico with the fintech law in place,” he noted.

Interpretation of ‘Consumer’

Some of the rules Banxico imposes are not clear, however. Acosta Checa told news.Bitcoin.com:

Since the circular seems to have been written in a rush and without careful analysis and basic competence, it leaves to the interpretation of certain important things.

For example, in his interpretation, “financial institutions and foreign trade companies are not a ‘consumer’ and thus can operate freely” with his exchange. Isbit has already “shifted gears to serving businesses, corporations and institutions (which are allowed to hold virtual assets in their balance sheets according to the previous bill published March 9, 2018). Thus we will not shut down or lose our most valuable customers,” the CEO emphasized.

Bank of Mexico's Attempt to Regulate Crypto Is a Disaster, Exchange CEO Explains

Nonetheless, Acosta Checa understands that, under the new rules, if his exchange wants to “continue serving final ‘consumers/the public’ we will need to appeal to the Amparo Law and ask a court to suspend the application of the circular published by the Bank of Mexico (not the entire bill passed by the previous government administration on March 9, 2018).” He clarified:

According to the March 9th bill passed by the [Mexican] congress, we have permission to operate with ‘consumers’ till September.

Damaging the Economy

The CEO of Isbit believes that the new crypto asset rules will negatively impact the country’s economy as a whole. He explained that “Mexico is the endpoint to the biggest remittance corridor in the world (second largest population of migrants), the 6th most visited country by tourists and [is the] country with the largest number of free trade agreements.” Therefore, the country “has a lot to gain from the industrial application of virtual assets (activos virtuales) to facilitating free trade, tourism and financial inclusion,” Acosta Checa detailed, concluding:

The impact goes beyond the crypto industry. I believe it damages the economy as a whole.

What do you think of the rules set by the central bank of Mexico? Let us know in the comments section below.


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Crypto Enthusiasts Unite in 4 Indian Cities to Voice Regulatory Suggestions

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A community roadshow has been uniting crypto enthusiasts in several cities in India to share their ideas on the country’s crypto regulation. “The best ones will be included in the report to be submitted to the decision makers amongst the government,” the organizer of the events explained.

Also read: Indian Government Confirms Cryptocurrency Regulation in Final Stages

Uniting Crypto Enthusiasts

Blockchained India has been hosting a series of roadshow meetups in a number of cities in the country where it has chapters. The theme of the meetings is “Does India need crypto regulations?” These events are part of a run-up to the group’s larger event called the “India Dapp Fest” which is planned for May.

There are four open town hall meetings altogether. One is being held on March 16 in Hyderabad. Two have already been held: one in Delhi and the other in Mumbai. The fourth meeting in the series will take place in Bangalore on March 30. Manav Ailawadi, a key member of the group, was quoted by Crypto News India on Friday as saying:

So far, everything that has been happening on a national level (for crypto) has been about cryptocurrency exchanges, primarily. We wanted to unite the community which also includes, investors, stakeholders, developers, and make them a part of the conversation.

Crypto Enthusiasts Unite in 4 Indian Cities to Voice Regulatory Suggestions

Blockchained India co-founder Akshay Aggarwal tweeted on Friday that “The intentions with this roadshow are pure. We want to help the good folks hustling day and night from the crypto space.” He has urged the community to join in on the roadshow and voice their opinions regarding the crypto regulation in India. On March 6, he tweeted:

… it’s time for you all this Saturday to share your opinions around whether India needs crypto regulations. The best ones will be included in the report to be submitted to the decision makers amongst the government.

Aggarwal told news.Bitcoin.com earlier this month that people who are unable to attend the meetings physically are emailing his organization their ideas so they can be included in the report to be submitted to the government.

Mumbai Event

At the Mumbai event last week, Crypto News India reported that approximately 100 people and between 70 and 80 founders from crypto exchanges and other crypto-based companies attended. In addition, there were lawyers, investors, marketers, and researchers at the event, Ailawadi told the news outlet.

Crypto enthusiast Aman Kalra tweeted on March 10 after speaking at the Mumbai event that he shared his views “on possible regulations around crypto in India and how we as a community can contribute to it.” He elaborated, “It was great discussing all of this with our energetic community.”

Crypto Enthusiasts Unite in 4 Indian Cities to Voice Regulatory Suggestions

‘India Wants Crypto’ Campaign

The CEO of cryptocurrency exchange Wazirx, Nischal Shetty, also spoke at the event in Mumbai. He started a Twitter campaign on Oct. 31 last year calling for positive crypto regulations. The campaign has entered its 135th day.

According to Aggarwal, Shetty explained to event attendees: “We didn’t select the RBI but the ministers who are supposed to make the decisions for us. Humbly I started Indiawantscrypto campaign tagging the ministers we selected, hoping someday they will notice us.”

The Indian government is currently drafting the regulatory framework for cryptocurrencies. On Feb. 25, the country’s supreme court gave the government four weeks to come up with crypto regulation. The court will then hear the petitions against the crypto banking ban by the country’s central bank, the Reserve Bank of India (RBI).

What do you think of these meetings? What opinion would you voice to the Indian government? Let us know in the comments section below.


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Canadian Capital Market Regulators Mull New Cryptocurrency Rules

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Capital market regulators in Canada are planning to establish new rules to curb the risks associated with cryptocurrency trading platforms. This follows the sudden death of Gerald Cotten, founder and chief executive officer of crypto exchange Quadrigacx, which led to about $145 million in frozen or missing cryptocurrencies.

Also read: Bitcoin Exchange Gatecoin Shuts Down Citing Financial Difficulty

Tailored Requirements for Crypto Exchanges

In a joint new consultation paper on March 14, the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) spoke of the need to come up with tailored requirements to address the “novel features and risks” of digital currency exchanges.

“We must adapt to innovation, and provide clarity to the market about how regulatory requirements might best be tailored and applied to these unique business models, while maintaining investor protection,” the regulators detailed.

“We endeavor to facilitate innovation that benefits investors and our capital markets, while ensuring that we have the appropriate tools and understanding to keep pace with evolving markets,” they added.

Canadian Capital Market Regulators Mull New Cryptocurrency Rules

Cotten died in India on Dec. 9 without revealing the keys to cold wallets containing CAD $190 million (~US $145 million). A Nova Scotia Supreme Court judge in February granted Quadriga’s request for creditor protection from as many as 115,000 customers. Investigations by Ernst & Young, the court-appointed monitor in the case, have given little hope the funds will ever be recovered.

However, the Quadrigacx saga has exposed a gap in the Canadian cryptocurrency industry regulation system, prompting investors to query who would be held accountable in the event of a loss. In the past few months, industry players and other concerned stakeholders have increased calls for regulation, although some legal experts are curious to know whether securities regulators have jurisdiction over the asset class.

Regulatory Clarity

Faced with such a tricky situation, the CSA and IIROC have now resolved not only to provide clarity for cryptocurrency businesses, but also to create greater market integrity and address investor protection risks, explaining:

Regulators around the world are currently considering important issues surrounding the regulation of crypto assets including the appropriate regulation of platforms. We intend to use this feedback to establish a framework that provides regulatory clarity to platforms, addresses risks to investors and creates greater market integrity.

The consultation paper solicits input from the financial technology community, market participants, investors and other stakeholders on how requirements may be tailored for digital currency exchanges operating in Canada. It comes at a time when interest in crypto assets among investors, governments and regulators globally has increased significantly since the creation of Bitcoin in 2008.

The total value of crypto assets grew to $800 billion in early 2018, and although the value has since fallen due to market volatilities, interest in cryptocurrencies remains high. There are currently over 2,000 crypto assets that may be traded for government-issued currencies or other types of crypto assets on over 200 platforms that facilitate the buying, selling and transferring of crypto assets.

Canadian Capital Market Regulators Mull New Cryptocurrency Rules

But there are concerns by government overlords that lack of regulatory oversight on these platforms may have spurred increased fraudulent activities involving cryptocurrencies, thereby curtailing investment. According to the Globe and Mail, many Canadian cryptocurrency exchanges are taking steps to address customer concerns and guarantee investor fund protection following the Quadrigacx event.

For example, Toronto-based Bitbuy has simulated a number of disasters – including nuclear attacks and the sudden passing of all of its directors – to ensure that customers would still be able to access their funds, the newspaper reported. Bitbuy also recently hired a U.S.-based blockchain forensics company to review its solvency status, its methods for storing cryptocurrency, and its asset segregation practices, it said.

What do you think about cryptocurrency regulation in Canada? Let us know in the comments section below.


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