Getting crypto money into an Israeli bank

Most Israelis who hold crypto never struggle to buy it. The trouble starts on the day they want the money back in their bank account, to put down a deposit on a flat, pay a tax bill or just see it in shekels. Figures presented in the Knesset put Israeli crypto holders at about 1.67 million, yet only around ₪2.7 billion a year, roughly 4% of crypto-sourced money, actually reaches Israeli banks. That gap is what this page is about: what an Israeli bank may ask for, what to prepare before you sell, and what to do when the answer is no.

One thing this page is not: a selling guide. The mechanics of converting coins and withdrawing shekels are covered in how to sell crypto and cash out in Israel. Here we deal with the step after that, the moment your money meets the bank's compliance team.

Directive 411: what the bank must do, and what it may ask

The rule that matters is Proper Conduct of Banking Business Directive 411, issued by the Bank of Israel. It was amended in 2022, and the amendment took effect on 9 November 2022. Its key line: a bank may not refuse a service solely because a transaction involves virtual currency. Instead of a blanket block, each bank needs a risk policy that weighs the type of coin, how anonymous it is, the service provider the money passed through and your own profile as a customer.

The same amendment has a second half, and it is the one people feel. Once crypto activity exceeds roughly ₪100,000 a year, the bank must examine the source of funds and the "virtual-currency trail" in depth, from the first shekel to the final sale. The directive also asks banks to treat money from licensed service providers differently from money that came through unlicensed ones. In practice, according to law-firm summaries, most banks accept only a handful of well-known coins such as BTC, ETH and USDC, and money from a short list of platforms, mostly licensed Israeli ones.

It helps to know what happens on the platform side too. Directive 411 binds banks, but licensed financial-asset service providers have their own duties under the 2021 amendment to the Anti-Money Laundering Order: identity checks, the travel rule and reports to the Israel Money Laundering and Terror Financing Prohibition Authority (IMPA) for transactions of ₪50,000 and above. None of this means you did anything wrong. It is routine, and it is one reason money arriving from a licensed Israeli platform looks lower-risk to a bank than money arriving from abroad.

The 14 July 2026 draft: from automatic checks to a risk-based approach

On 14 July 2026 the Banking Supervision Department published a draft amendment to Directive 411. As reported in the Israeli financial press, it would replace the automatic deep check of all crypto money above ₪100,000 a year with three risk tiers:

• Low risk, fast track: money from licensed Israeli firms, or from authorised foreign entities in low-risk jurisdictions.
• Medium risk: standard checks.
• High risk: anonymous wallets, mixers or high-risk jurisdictions, which would require enhanced due diligence and sign-off from senior management.

The draft would also stop requiring banks to keep tracing an asset once it has been converted to ordinary money, and it repeats that a bank may not refuse payment services solely because funds came from crypto. Banks would weigh the issuer, the asset's features, the customer's profile and the size and complexity of the transaction. The draft was opened for public comment and is expected to apply about six months after final publication. As of October 2026 we could not confirm a final version, so the 2022 wording still governs.

The practical lesson is already clear. Even under the new rules, people who bought and sold through a licensed Israeli platform will sit in the easy lane, and people whose coins passed through a private wallet, a mixer or an exchange in a high-risk country will get the heaviest scrutiny. The choices you make now decide which lane you end up in later.

1. 9 Nov 2022Amended Directive 411 in force

   No automatic refusals; risk checks and source-of-funds review above about ₪100,000 a year.

2. 23 Dec 2023Tax Authority temporary procedure

   Tax on crypto gains can be paid straight from a foreign exchange account, which helps when a bank will not take the proceeds.

3. Feb 2026One Zero opens an in-house check

   Crypto-sourced funds reviewed by the bank for 3%, as a pilot.

4. 14 Jul 2026Draft amendment to Directive 411

   Three risk tiers and a fast track for money from licensed firms.

5. 14 Aug 2026Leumi announces crypto trading

   BTC, ETH and SOL with Galaxy, targeted for early 2027, subject to Bank of Israel approval.

6. 2027CARF

   First automatic exchanges of crypto-account data between countries.

Closed loop vs open garden: why it decides how many questions you get

Two terms come up in every conversation with an Israeli banker about crypto. A closed loop (גן סגור) is a full round trip inside one licensed Israeli platform: shekels left your account, you bought, held and sold there, and the shekels came back to the same account. From the bank's point of view the whole chain is visible and runs through a supervised firm, so the risk is low. Bits of Gold issues customers a signed Closed Loop Certificate alongside a signed transaction history and an annual tax report. Bit2C accepts shekels only from one Israeli account in your own name, pays out to the same account and offers to pay your crypto tax straight from the balance.

The open garden (גן פתוח) is everything else: coins bought on an international exchange, moved to a hardware wallet, used in DeFi or bought years ago on a platform that no longer exists. None of that is illegal or suspicious in itself, but the bank will want to see the whole route. There is a practical bridge. Some licensed Israeli platforms accept coins from outside and sell them for shekels: Bits of Gold charges 1.95% plus VAT to sell from an external wallet, and Altshuler Shaham Horizon has a similar "open garden" service. The money then reaches your bank from a licensed firm, even if you still have to document the part that happened abroad.

Proof of source of funds: the documents an Israeli bank asks for

There is no single form used by every bank, but according to summaries from accountancy firms that handle these deposits, the list repeats itself. The table sorts it by what each document proves and where you get it. The more of these rows you bring ready, the shorter the conversation.

Two practical notes. First, the hardest part to rebuild is the beginning. If you bought in 2017 on an exchange that has since closed, look for the bank statement that shows the original transfer out, confirmation emails and old screenshots. Second, the documents have to agree with each other. A declaration that says "₪50,000 of savings" next to a history showing ₪200,000 of deposits raises more questions than a missing page would.

Checklist before you sell a large amount

The common mistake is to sell first and ask later. Once the money is on its way to your account, every delay feels like a freeze. The right order is the reverse:

1. Talk to your bank before you sell

   Ask your banker for the list of documents and the platforms the bank is comfortable with. Bits of Gold itself tells customers to check with their branch first, because every bank has its own policy.

2. Collect every report

   Download the transaction history from every platform and wallet you have used, including the ones you no longer use. Platforms close and accounts get locked.

3. Pick an exit route your bank understands

   Prefer a licensed Israeli platform that pays shekels to an account in your name. If the coins sit on a foreign exchange, consider moving them to an Israeli platform and selling there. How selling and withdrawing works.

4. Work out the tax first

   Capital gains are taxed at 25% for individuals. Bit2C offers to pay the tax straight from your balance (1%, minimum ₪2,000, as a pilot), and Bits of Gold Premium handles tax vouchers. How Israeli crypto tax is calculated.

5. Give the full picture once

   One tidy package beats ten trips to the branch. Partial information, or a story that changes between meetings, is the most common reason a freeze drags on.

What Israeli banks actually do: One Zero, Leumi, Yahav and the rest

As of October 2026, no Israeli bank sells crypto to customers. The closest is Leumi. In August 2026 it announced that Leumi Trade and PEPPER customers will be able to buy, hold and sell BTC, ETH and SOL, with trading and custody from Galaxy (Galaxy Custody, formerly GK8). The target is early 2027, subject to Bank of Israel approval. It is worth remembering that Leumi's 2022 plan with Paxos never launched for exactly that reason. If you want bitcoin exposure through your bank's brokerage account today, the route is the bitcoin funds listed on the Tel Aviv Stock Exchange.

The most interesting move on the deposit side came from One Zero. According to a February 2026 report, the digital bank reviews crypto-sourced funds in-house for 3% of the amount, instead of the customer paying for an outside expert opinion that, per the same report, can cost tens of thousands of shekels with no guarantee of acceptance. The service covers assets held on licensed exchanges and can give preliminary approval before you sell, which helps with tax timing. It launched as a pilot for a limited number of customers.

Other banks publish their Directive 411 policies. Bank Yahav posts a summary of its policy on payment services related to virtual-currency activity, and Bank Hapoalim has a similar document on its site. Other banks likely do the same, so it is worth searching your own bank's site before you walk into the branch. An older snapshot from 2022 showed a mixed picture: Hapoalim and First International reviewed case by case and accepted money from Kraken, Bits of Gold and Bit2C with proof and tax papers, Mizrahi-Tefahot did not allow it, and Discount allowed money out but not in. A lot has changed since, so do not rely on it without checking.

Two more data points. A State Comptroller report reportedly found that banks still put up significant obstacles, and a separate Comptroller report from November 2024 estimated ₪2–3 billion of uncollected crypto tax. In the courts, the Tel Aviv District Court ruled in June 2024, in Clearship v Bank Leumi, that suspicion alone did not justify closing a crypto company's account. Other rulings have sided with banks that refused deposits when the paperwork was weak. Either way, documentation is your strongest card.

The bank refused or froze the money: what now

First, breathe. A refusal or a hold is usually about paperwork, not an accusation. The steps, in order:

1. Ask for the reason and the policy in writing. Ask exactly what is missing, which part of the bank's policy it falls under, and which documents would resolve it. A written answer is the basis for every next step.
2. Fill the gap. Most of the time it is a platform report, proof of the original shekels or a tax document. If the trail is complex, consider an expert opinion or a review like One Zero's.
3. Consider a route the bank recognises. Moving the coins to a licensed Israeli platform and selling there brings the money in from a supervised firm, which is exactly what the draft directive treats as low risk.
4. Complain to the bank, then to the Bank of Israel. If the bank does not answer or explain, use its public complaints unit. If that fails, the Banking Supervision Department at the Bank of Israel has a public enquiries unit. Attach the written answer and the documents you submitted.
5. For account closures, get legal advice. The Clearship ruling shows general suspicion is not always enough, but every case is decided on its facts.

Finally, a note on what is coming. From 2027 Israel is expected to start receiving data on residents' foreign crypto accounts under the OECD's Crypto-Asset Reporting Framework (CARF), and the voluntary-disclosure procedure that covered crypto closed on 31 August 2026. If you have unreported gains, the options are in our voluntary disclosure guide. And if you have not bought yet and want the route that is simplest for your bank later, compare platforms in our exchange ranking and read buying crypto by bank transfer.

Frequently asked questions

Sources

1. Bank of Israel — Banking Supervision · checked October 2026
2. Bizportal — draft amendment to Directive 411 (14 Jul 2026, Hebrew) · checked October 2026
3. ice.co.il — One Zero checks crypto funds for 3% (24 Feb 2026, Hebrew) · checked October 2026
4. The Block — Leumi taps Galaxy for BTC, ETH and SOL trading (14 Aug 2026) · checked October 2026
5. Bank Yahav — policy summary on virtual-currency payment services (Hebrew) · checked October 2026
6. Bits of Gold — reports and Closed Loop Certificate · checked October 2026

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