2013-04-11 Israeli banks limit money connected to bitcoin.

[ripper234]

I just made a wiki page (Hebrew) that summarizes the banking issues in Israel that Bitcoil (the largest/oldest exchange) has ran into.

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[ripper234]

Updates:

1. My bank (Mizrahi Tfahot) has refused my request from more than a month ago to wire about $7,500 to Mt. Gox. They said they would "look into whether my request is ok or not" ... and haven't gotten back to me yet.
2. Another bank (Beinleumi) has formally refused one of their clients, and wrote in a formal letter:

(Rough translation by me)

From a check made in the bank it seems that your account contains activity involved with virtual currency.
The activity is characterized by issuing wire transfer to a company called MTGOX, through which this currency is purchased.

Virtual currency is anonymous and unregulated. Trading them is not regulated and thus poses a high risk for the bank.

Therefore, the bank has decided not to allow such activity for our customers, until guidance/clarifications are issued by the Israel Central Bank.

You are requested to stop any such activity.

We inform you that if you do not comply, we will have to refuse any activity directly or indirectly related to this area of activity.

Signed by his branch (Ramat Aviv)

[caveden]

Wow.... they simply deny you the right to spend your money, shamelessly.

This is serious. It's the most aggressive bankster attack on Bitcoin so far. Previous attacks focused the exchanges, this is targeting individuals.

I suppose Israeli people may continue using solutions as localbitcoin to counter such attack. But I wonder how easy it would be for Israelis to use this solution to bring and send bitcoins internationally. If it's not simple, that might provoke price differences.

[farfiman]

Wow.... they simply deny you the right to spend your money, shamelessly.

This is serious. It's the most aggressive bankster attack on Bitcoin so far. Previous attacks focused the exchanges, this is targeting individuals.

I suppose Israeli people may continue using solutions as localbitcoin to counter such attack. But I wonder how easy it would be for Israelis to use this solution to bring and send bitcoins internationally. If it's not simple, that might provoke price differences.

I guess they are scared shitless. Since it's a small market it's much easier for them to "contain" us from transferring money to Mtgox.  Who knows, someday they might say we can can't transfer money to buy precious metals.....

[ripper234]

Wow.... they simply deny you the right to spend your money, shamelessly.

This is serious. It's the most aggressive bankster attack on Bitcoin so far. Previous attacks focused the exchanges, this is targeting individuals.

I suppose Israeli people may continue using solutions as localbitcoin to counter such attack. But I wonder how easy it would be for Israelis to use this solution to bring and send bitcoins internationally. If it's not simple, that might provoke price differences.

Indeed.

I haven't heard of any case in the world where individuals were formally forbidden from wiring money to Mt. Gox (please let me know if I missed anything!)

Localbitcoins is fine ... we also have a Facebook group for exchange, but it's a small market and lacks liquidity.
Some Israeli exchanges are still working somehow ... for the time being ... but they're all limited in some way and at a constant shutdown risk.

[WiW]

The exchanges I work with still function, namely Bitgo and Bits of Gold. I know BoG exchanges via some Euro exchange, but I don't know about Bitgo.

[farfiman]

The exchanges I work with still function, namely Bitgo and Bits of Gold. I know BoG exchanges via some Euro exchange, but I don't know about Bitgo.

I guess they have a foreign bank account.  Bitgo has a very low amount of bitcoins for sale - 5000$ worth ...
Bits of gold  uses a MTgoxEUR-EUR to ILS exchange rate so they must use a European bank?

[arruah]

Updates:

1. My bank (Mizrahi Tfahot) has refused my request from more than a month ago to wire about $7,500 to Mt. Gox. They said they would "look into whether my request is ok or not" ... and haven't gotten back to me yet.
2. Another bank (Beinleumi) has formally refused one of their clients, and wrote in a formal letter:

(Rough translation by me)

From a check made in the bank it seems that your account contains activity involved with virtual currency.
The activity is characterized by issuing wire transfer to a company called MTGOX, through which this currency is purchased.

Virtual currency is anonymous and unregulated. Trading them is not regulated and thus poses a high risk for the bank.

Therefore, the bank has decided not to allow such activity for our customers, until guidance/clarifications are issued by the Israel Central Bank.

You are requested to stop any such activity.

We inform you that if you do not comply, we will have to refuse any activity directly or indirectly related to this area of activity.

Signed by his branch (Ramat Aviv)

You have the right to file a case against them. And surely win.

[Maciek]

Updates:

1. My bank (Mizrahi Tfahot) has refused my request from more than a month ago to wire about $7,500 to Mt. Gox. They said they would "look into whether my request is ok or not" ... and haven't gotten back to me yet.
2. Another bank (Beinleumi) has formally refused one of their clients, and wrote in a formal letter:

(Rough translation by me)

From a check made in the bank it seems that your account contains activity involved with virtual currency.
The activity is characterized by issuing wire transfer to a company called MTGOX, through which this currency is purchased.

Virtual currency is anonymous and unregulated. Trading them is not regulated and thus poses a high risk for the bank.

Therefore, the bank has decided not to allow such activity for our customers, until guidance/clarifications are issued by the Israel Central Bank.

You are requested to stop any such activity.

We inform you that if you do not comply, we will have to refuse any activity directly or indirectly related to this area of activity.

Signed by his branch (Ramat Aviv)

You could try Polish Bitcoin Exchange - Bitcurex

https://eur.bitcurex.com

[Gabi]

Wow, this is absurd 

This is exactly why we need bitcoin!

[peter.baril]

Updates:

1. My bank (Mizrahi Tfahot) has refused my request from more than a month ago to wire about $7,500 to Mt. Gox. They said they would "look into whether my request is ok or not" ... and haven't gotten back to me yet.
2. Another bank (Beinleumi) has formally refused one of their clients, and wrote "<clip>... refuse any activity directly or indirectly related to this area of activity.

Just to be sure I understand, they have refused to wire a portion of your own legitimate savings to a third party of your choice? Period?

So:

1)   If you owed me $7,500 and wanted to repay me by wire, would that be ok?

2)   If I, living in another country, choose to convert my $7,500 into some clothing, a mountain bicycle, vintage wine and some BTC, that is presumably outside the jurisdiction of any Israeli business?

3)   If I later choose to donate some BTC from my bank to your electronic wallet, surely that is also outside the responsibility of a competing Israeli bank?

If my premises above are correct, I can only suggest you move your savings to a different bank.  


    

[ripper234]

Just to be sure I understand, they have refused to wire a portion of your own legitimate savings to a third party of your choice? Period?

So:

1)   If you owed me $7,500 and wanted to repay me by wire, would that be ok?

2)   If I, living in another country, choose to convert my $7,500 into some clothing, a mountain bicycle, vintage wine and some BTC, that is presumably outside the jurisdiction of any Israeli business?

3)   If I later choose to donate some BTC from my bank to your electronic wallet, surely that is also outside the responsibility of a competing Israeli bank?

If my premises above are correct, I can only suggest you move your savings to a different bank.  
    

Yes, this is pretty much it, as absurd as that sounds.

Fortunately I personally have another bank account in Israel, which has allowed me to send money to Mt. Gox recently. But - in any case, I am actively working on getting myself an account with a foreign bank.

I have just filed a claim to the "supervisor on banks" (המפקח על הבנקים) to understand what's the general regulatory situation. Will post updates as I get them.

[WiW]

The exchanges I work with still function, namely Bitgo and Bits of Gold. I know BoG exchanges via some Euro exchange, but I don't know about Bitgo.

I guess they have a foreign bank account.  Bitgo has a very low amount of bitcoins for sale - 5000$ worth ...
Bits of gold  uses a MTgoxEUR-EUR to ILS exchange rate so they must use a European bank?

Having a foreign bank account can help to sever the trail between Israel and Mt.Gox but money still needs to be transfered abroad because the exchange gets paid in ILS in Israel.

[farfiman]

The exchanges I work with still function, namely Bitgo and Bits of Gold. I know BoG exchanges via some Euro exchange, but I don't know about Bitgo.

I guess they have a foreign bank account.  Bitgo has a very low amount of bitcoins for sale - 5000$ worth ...
Bits of gold  uses a MTgoxEUR-EUR to ILS exchange rate so they must use a European bank?

Having a foreign bank account can help to sever the trail between Israel and Mt.Gox but money still needs to be transfered abroad because the exchange gets paid in ILS in Israel.

Thats easy. They get ILS into their account and convert to euro and send it to their own foreign bank account.
Of course the bank can start asking question about the ILS coming into the account- thats how the problems started
for bitcoil I think.

[BitcoinBarrel]

Excuse me Mr. Jones, we noticed that you were trying to spend your money and unfortunately we're not going to let you do that. Sorry.

[owsleybeatsbigcartel]

http://glz.co.il/1087-15603-HE/Galatz.aspx


"Banks in Israel against bitcoin ': Jonah Liibzon, Israeli banks are struggling virtual currency holders. In some branches of banks began to restrict this coin changers, whose value soared in recent months, and is not subject to any government control. Bitcoin dealers "are no longer authorized to transfer or receive dollars from Japan, where most trading takes place in the industry."

From Israeli radio.  translated with google
 

i wonder about tor!.~.prolly pissing them off too ha

[owsleybeatsbigcartel]

Excuse me Mr. Jones, we noticed that you were trying to spend your money and unfortunately we're not going to let you do that. Sorry.

lets build a big ass fffing wall to keep the bitcoinerzzz out! ...wh00ps nevermind scrrr

[ripper234]

Thats easy. They get ILS into their account and convert to euro and send it to their own foreign bank account.
Of course the bank can start asking question about the ILS coming into the account- thats how the problems started
for bitcoil I think.

Actually with Bitcoil the problems started with the increased demand on January ... the bank asked us to limit our dollar activity to $150,000 a month. It was ok for Jan, a little bad on Feb, but on March and April was totally unmanageable due to increased Bitcoin prices and demand.

Funny story:

We recently opened a non-trading account in one of the largest Israeli banks, Bank Leumi. We told them we're "developing products related to Bitcoins", which we were, but didn't intend to trade using that account.

A few weeks afterward, we changed our minds, and asked the bank whether we can trade Bitcoins via this account. Three days later the reply came "please close your account ASAP". Not "you can't trade bitcoins", but they repeatedly asked us to close our bank account and cease any activity, even though we've never traded bitcoins via that account, and were content not to do so.

BTW, other Israeli companies are currently successfully trading via Bank Leumi. I don't know if it's because they have personal connections with the bank, or if it's just because the bank haven't noticed them yet, or because it's a different branch and every branch does whatever the fuck they want.

It's rather unfair and annoying as hell to us, but at this point we won't approach our competitors' specific branch and ask to open an account there "because if they can, why not us" ... we don't want to risk their account to be closed - we rather the Israeli public have a few places they can still trade at.

[cypherdoc]

The exchanges I work with still function, namely Bitgo and Bits of Gold. I know BoG exchanges via some Euro exchange, but I don't know about Bitgo.

I guess they have a foreign bank account.  Bitgo has a very low amount of bitcoins for sale - 5000$ worth ...
Bits of gold  uses a MTgoxEUR-EUR to ILS exchange rate so they must use a European bank?

Having a foreign bank account can help to sever the trail between Israel and Mt.Gox but money still needs to be transfered abroad because the exchange gets paid in ILS in Israel.

What does ILS stand for?

[WiW]

Thats easy. They get ILS into their account and convert to euro and send it to their own foreign bank account.
Of course the bank can start asking question about the ILS coming into the account- thats how the problems started
for bitcoil I think.

If they can blacklist Mt.Gox's account, they can blacklist an active exchange's account... Another one of those games could ensue (as has with torrent websites) where random bank accounts would pop up around the world until banks blacklist them and repeat.

What does ILS stand for?

Israeli Shekel.