Israeli Bank Denies Retiree’s Bitcoin Profits

Israel’s Hapoalim Bank has refused to accept the $273,000 Bitcoin (BTC) profits of 70-year-old retiree Esther Freeman, citing regulatory policies as the reason for their decision.

Esther Freeman has been engaged in a legal battle against Hapoalim Bank since 2021 due to the uncertainty surrounding crypto regulations.

Israeli Citizen Bank

After two years of dispute, Freeman and Israel’s second-largest commercial bank have finally reached a settlement. As part of the settlement, each party will pay their own legal fees. However, the exact terms of the agreement have not been disclosed.

“Bitcoin retiree” Esther Freeman; Source:

In 2021, Freeman, a client of Hapoalim Bank for 40 years, sued the bank for refusing to accept her Bitcoin profits as deposits.

Since her initial Bitcoin purchase in 2013, Freeman’s initial investment amount has increased over a hundredfold.

In 2013, Freeman invested 10,000 shekels (approx $2,700) in Bitcoin (BTC) through a third party, as digital asset exchanges were not widely available at the time. She was unable to purchase her Bitcoins through a crypto exchange, as is common today.

For detailed guidance on choosing a crypto exchange, read our comprehensive guide on how to choose a crypto exchange.

By July 2021, when Bitcoin was trading at around $58,000, Freeman’s investment was worth almost 1 million shekels (approx $273,000), as reported by CTech.

Why Did the Bank Refuse the Deposits?

In its defense, the bank argued that it was unable to accept the amount under the terms of its regulations. Additionally, Freeman’s Bitcoin purchase was not made through a regulated or monitored company, but rather through an individual using cash.

Bank regulations require appropriate risk assessments, the establishment of policies, and tracking of a digital asset’s journey from acquisition to fiat money.

The bank stated:

“It is not possible to trace the path of the money related to the purchase [of Bitcoin].”

The bank can only approve deposits in cases where the buying and selling of digital currencies come from the same account. That is why Freeman’s Bitcoin profits were not accepted by the bank.

Last year, the Bank of Israel’s Banking Regulatory Department issued a draft regulation in response to the increased use of digital assets like Bitcoin in consumer transactions. The regulation aimed to address concerns regarding money laundering and terrorist financing.

In the fight against crypto money laundering and terrorist financing, Israel recently seized $1.7 million in cryptocurrency from wallets used to fund the Iranian Hezbollah militant group. In May 2023, Israeli authorities also seized Binance accounts used by the militant organizations Hamas and the Islamic State.

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