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Israeli Bank Finally Allows Retiree to Deposit $270k Bitcoin Profits

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By Brennan Forrest - - 5 Mins Read
Bank "Hapoalim" head ofiice in Tel Aviv
Israeli Bank Hapoalim (Shutterstock) |

There has been a prolonged legal battle in Israel between a Bitcoin investor and the country's second-largest commercial bank, Bank Hapoalim. In 2021, a customer of the bank filed a lawsuit after they were denied the ability to deposit funds from their Bitcoin investment. The issue at hand was that Bank Hapoalim refused to accept the deposit despite the customer being registered with the bank.


Esther Freeman, on the other hand, is a 70-year-old retiree who was suing her bank for refusing to collect a profit she made from Bitcoin. Apparently, Freeman made a significant Bitcoin investment sometime in 2013 and left it until 2021, when the price of Bitcoin skyrocketed to about $58,000.


Freeman invested NIS 10,000 ($2,700) in Bitcoin (BTC) in 2013 using a third party to get access to her tokens. She may have given third-party money in exchange for the Bitcoin she now owns. At that period, crypto exchanges were not as rampant and accessible as today.


According to local media, it was in July 2021 that Freeman had wanted to withdraw some of her profits from her investment, which was worth around  NIS 1 million ($273,000) at that time. 


The bank refused to grant her wish based on many claims. This made Freeman take her bank to court, and the case raged on for over two years. 


Bank Sued After Refusing Customer's Deposit 

Bitcoin in Israel does not have a clear outlook, nor do Israel's crypto laws. But at that time, the Bank Hapoalim refused to allow Freeman to deposit her money.


The individual sued their bank but the institution defended itself by citing government regulations. The bank argued that since the individual purchased Bitcoin through a private entity, they were unable to determine the source of the funds. The bank claimed that it could not accept deposits from unregulated sources due to recently established regulations. 


However, the two parties made peace after agreeing to drop the case. The details behind the agreement were not revealed. But one local media gathered that each party paid each other's legal fees. However, since the time Freeman sued her bank, the price of Bitcoin has dropped by more than 50%. 

Also Read: Israeli Authorities Intercept Crypto Funds Meant to Fund Terror

Bank of Israel Makes New Changes 

Because of the increased trading of digital assets such as cryptocurrencies in the country, the bank had to release a draft regulation to address AML/CFT concerns last year.


The Banking Supervision Department released this draft regulation. With the new regulations, banks in Israel will be required to make stringent checks before accepting and processing deposits and withdrawals. This is because cryptocurrencies and other digital assets can be used for money laundering or used for terrorist attacks in the country. 


Some of the draft regulations they released said, "Conduct a risk assessment and set out policy and procedures for the transfer of money that originates in or is destined for virtual currencies, taking a risk-based approach and identifying the virtual currency service provider."