The Israeli pensioner Esther Freeman has reportedly turned an ILS 10,000 Bitcoin investment, worth roughly $3K at that time, into ILS 1,000,000 (~$324K) in eight years. However, Hapoalim Bank one of the largest in the country denied accepting the profits as the initial investment source might have had a connection to illegal financial operations.
In 2013 a 69-year old retired citizen of Israel, Esther Freeman, decided to enter the cryptocurrency market by investing around $3,240. Despite her 69 years, the pensioner said she is young in spirit and that her younger relatives mainly influenced her decision:
I listened to my son and nephews, to the young guys, and said that an attempt would be made. Without any knowledge on the subject, in the real innocence of an ordinary citizen. I never thought that NIS 10,000 would become almost NIS 1 million.
Even though Freeman has multiplied her investment by 100 times, Bank Hapoalim refused to deposit the amount transferred from the FIAT-cryptocurrency platform she used as the initial deposit years ago was made in cash.
Therefore, the source of the funds might have related to money-laundering or terrorist financing, the bank explained. Furthermore, the institution outlined some of the notorious dark sides of the digital asset industry that banks typically provide:
The characteristics of virtual (i.e., digital) currencies allow them to be transferred anonymously and unsupervised, often bypassing the need to use the financial factors that apply to the anti-money laundering and terrorist financing regime.
To have a better chance to obtain her funds, Freeman appointed Shaul Zioni as her law attorney and opened a lawsuit against the bank. The pensioner said that over the years, she had been a loyal client to the bank, and she needs the money so she can help one of her children:
The bank knows my conduct. I have no money anywhere else, only at Bank Hapoalim. They know I do not launder capital or do business outside the bank. I am retired. All four of my children have bank accounts. The money I need to help one of my children buy an apartment.
Freemans law attorney Shaul Zioni also spoke on the matter. He noted that his client wants the court to declare that the source of money invested in bitcoin is known, clear and supported by references. Over the years, Freeman has kept her Bitcoin in various digital wallets, in which no further transactions have been made, Zioni added.
Subsequently, the court ruled that the financial institution should not restrict account activity to its clients only because they are linked to digital currencies. Bank Hapoalim has received the case and vowed to study its details and respond in the usual way.
Due to the risks of using digital assets in criminal activities, Israels authorities recently planned to apply anti-terror banking rules.
As of now, the government had to spend significant resources to uncover fraud in areas where companies were not obliged to report all financial operations. If the new policy goes live, all crypto-related firms will need to make reports like banks.
The new rules should also benefit small digital asset enterprises as the reporting promises to be accessible and modernized. As such, those companies could provide greater confidence in the safety of their services.
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69-Year Old Israeli Lady Turned a $3K Bitcoin Investment to $320K: Now the Bank Refuses to Deposit - CryptoPotato