Esther Freeman, an Israeli pensioner, reportedly converted an ILS 10,000 Bitcoin investment (worth approximately $3K at the time) into ILS 1,000,000 ($324K). This was in just eight years. Hapoalim Bank, one of the biggest banks in the country, denied that the profits were accepted as an initial investment source. It is possible that the bank might have been involved with illegal financial operations.
Cash is the Problem
Esther Freeman, a retired Israeli citizen aged 69, made a decision to invest around $3,240 in the cryptocurrency market in 2013. The pensioner, who is 69 years old, said that she is still young in spirit and that her younger relatives were the main influence on her decision.
“I listened carefully to my nephews and sons, the young men, and suggested that we would make an attempt. In the innocence of an average citizen, I had no knowledge about the subject. It was a shock to me that NIS 10,000 would soon become NIS 1,000,000.
Esther Freeman. Source: YNET
Despite Freeman having multiplied her investment 100 times, Bank Hapoalim declined to deposit the amount transferred via the FIAT cryptocurrency platform. The initial deposit she made many years ago was in cash.
According to the bank, this could have been related to money-laundering, or terrorist financing. The institution also highlighted some of the darkest aspects of the digital asset market that banks are known for:
“The unique characteristics of virtual currencies (i.e. digital currencies) allow them to be transferred anonymously, unsupervised, and often bypass the need for the financial factors that are applicable to the anti-money laundering or terrorist financing regime.
Freeman named Shaul Zioni her lawyer and filed a lawsuit against the bank to give her a better chance of getting her funds. According to the pensioner, she was a loyal client of the bank over the years and needed the money to help one her children.
“The bank knows about my conduct. I don’t have any money in other places, but only at Bank Hapoalim. They know that I don’t launder capital nor do business outside of the bank. I am retired. All four of my children have bank account. I have the money to buy an apartment for one of my children.
Shaul Zioni, Freeman’s attorney, spoke out on the subject. Zioni said that Freeman’s client wanted the court to declare that her bitcoin source is “known, obvious, and supported by references.”
The court decided that the financial institution could not limit account activity to clients because they were linked to digital currencies. Bank Hapoalim received the case, and has promised to review its details and “respond in a normal way.”
Israel wants to treat cryptocurrency businesses like banks
Israel’s authorities have recently announced plans to implement anti-terror banking regulations due to the dangers of digital assets being used in criminal activities.
The government has had to expend significant resources in order to find fraud in areas that companies weren’t required to report. All crypto-related companies will have to report as banks if the new policy is implemented.
Small digital asset companies should also be benefited by the new rules, as they promise to make reporting easier and more modern. These companies can provide more confidence in the security of their services.
Marla Brooks – Financial Analysis
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