Bank Accounts of Crypto Professionals Frozen: A Troubling Trend

There has been a rise in the freezing or restriction of bank accounts belonging to crypto professionals in the UK, US, and EU in recent months. It’s often said that you don’t realize the impact until it happens to you. This week, it happened to me, unexpectedly.

Revolut, known as one of the most crypto-friendly banks in the UK, has raised concerns among its cryptocurrency-using customers with recent events. Despite offering crypto services, such as in-app purchases and limited crypto transfers, Revolut’s actions have sparked doubt about its commitment to providing a seamless experience.

The introduction of regulations like the Travel Rule in the UK has led to increased scrutiny on crypto transactions. Users now need to disclose information about unhosted wallets, adding a layer of complexity to withdrawals from Revolut.

How Revolut Froze My Account over 0.23ETH

After purchasing 0.23 ETH (£550) via Revolut and attempting to transfer the funds to my personal Ethereum wallet, I encountered a block on the transaction and subsequent freezing of my entire bank account. Despite eventually resolving the issue and getting a refund, my specific wallet address was kept blocked, highlighting concerns about Revolut’s crypto-friendliness.

The lack of transparency in explaining account freezes and wallet blocks raises doubts about user control and trust in Revolut’s handling of crypto transactions.

As financial institutions navigate post-Brexit regulations, balancing compliance with user experience becomes crucial. The abrupt closures of accounts without clear reasons risk alienating crypto users who rely on these services.

Debanking of Crypto Users in the US

In the US, even long-time customers of traditional banks face account closures due to crypto involvement. Instances like well-known figures having their accounts debanked raise questions about transparency and motivations behind these actions.

These incidents underscore the threat that even compliant individuals face regarding access to banking services, signaling potential setbacks for crypto adoption in the US.

Positive Friction and Regulatory Challenges

Regulatory measures like the UK’s ‘positive friction’ aim to introduce barriers to inform consumers about risks in crypto investments. However, these measures can hinder user experience and create unnecessary obstacles.

As debates around crypto regulation continue, the need for transparency, user control, and fair treatment of crypto users by financial institutions becomes more critical.

The events detailed in this article shed light on the growing challenges faced by crypto professionals in accessing banking services and navigating regulatory landscapes.