Hapoalim Bank refuses to credit pensioner’s Bitcoin profits

The largest bank in Israel, Hapoalim Bank, filed a response to the lawsuit by 69-year-old Esther Freiman, requesting dismissal of her demand to deposit 1 million shekels (~$320,000) earned from investments in Bitcoin. Ynet reports this.

Eight years ago, the retiree, following the advice of relatives, bought her first cryptocurrency for 10,000 shekels (at the time worth less than $3,000).

“I listened to my son and nephews, young guys, and said I would give it a try. With no knowledge of the subject, with the real naivety of an ordinary person. I never thought that 10,000 shekels would turn into almost a million,” Freiman said.

In July 2021 she decided to convert the digital assets into fiat.

However, Hapoalim Bank, where the woman had held an account for 40 years, refused to accept the funds for deposit. The financial institution said that Freiman invested cash, and the bank could not trace the movement of the money.

In a letter to the client, Hapoalim Bank noted that “the characteristics of virtual currencies allow them to be transferred anonymously and without oversight, often bypassing financial structures that combat money laundering and financing of terrorism”.

In November Freiman filed a suit against the bank, asking to permit her to deposit the amount obtained from selling Bitcoin into the account.

Hapoalim Bank stated in its filing that the plaintiff failed to confirm any link between the money on her account and the purchase of cryptocurrency. The bank noted that Freiman bought Bitcoin from an unknown person and “did not provide factual information about the price” of the asset.

Hapoalim Bank also cited the regulator’s position, which does not approve receiving funds from virtual asset operations without “a satisfactory explanation of the money’s movement”.

Freiman’s lawyer expressed regret at the bank’s “unfounded claims.” He said they were based on “baseless hypotheses.” The lawyer added that distrust that a pensioner could have invested in cryptocurrency influenced the bank’s position.

As previously reported, in 2019 crypto investors in Israel faced difficulties paying taxes due to banks’ refusal to accept funds from digital asset transactions.

In 2020, the local tax authority required cryptocurrency holders to disclose their assets and profits.

In 2021, the Israeli Ministry of Finance proposed to set a threshold of 200 000 shekels for this requirement.