‘Crypto-Friendly Bank’ Blocked Your Money? Good Luck Recovering It

Adoption Bank Cryptocurrency Security
Ad Disclosure
Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. However, this potential compensation never influences our analysis, opinions, or reviews. Our editorial content is created independently of our marketing partnerships, and our ratings are based solely on our established evaluation criteria. Read More
Last updated:
Ad Disclosure
Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. However, this potential compensation never influences our analysis, opinions, or reviews. Our editorial content is created independently of our marketing partnerships, and our ratings are based solely on our established evaluation criteria. Read More
Author
Simon Chandler
Author Categories
About Author

Simon Chandler is a Brighton-based writer and journalist with over ten years of experience writing about crypto, technology, politics and culture. He has written for Cryptonews.com since late 2017,...

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Ad DisclosureWe believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. Read more

“There is little that a customer can achieve by resorting to legal action to force the bank to release those funds.” “Seek to work with them to help them conclude their process as soon as possible.”

Source: iStock/SensorSpot

Sooner or later, you may be blocked out of your bank account. It can happen to any of us, and it can even happen with supposedly crypto-friendly “banks,” such as Bitwala, Revolut, and more.

The question is: what should you do if such a company freezes or blocks your account? Well, according to lawyers, there isn’t any legal ‘magic bullet’ you can use that will successfully get your account reopened.

Still, at the very least, you can seek to contact and cooperate with your company as fully as possible, assuming that they’ve frozen your account in order to carry out KYC (know your customer) or AML (anti-money laundering) checks. And in a worst-case scenario, you can always contact the financial regulator of the country where you and the bank are located.

Desperate clients

Complaints from people being locked out of their bank accounts are surprisingly common. Basically, if you tend to dabble in cryptocurrency trading or crypto-related business, and if you use a bank that accepts your custom as a ‘crypto person,’ you seem to be at greater risk of having your account blocked or frozen.

For example, the Berlin-based crypto startup Bitwala that provides German bank (solarisBank) accounts, is also being criticized for account-blocking on Reddit. Here’s Reddit user “pibyk” writing on the Bitwala sub-Reddit a couple of months ago:

“I consider myself to be sort of lucky as my account got blocked for no valid reason before I put anything in it. So there is nothing to recover and no hassle to get the money back. The message I got was meaningless, and their customer service failed to respond in any reasonable time. As far as I am concerned this action constitutes a serious breach of trust, so I am no longer interested in such an unreliable service.”

This kind of problem isn’t exclusive to Bitwala. Another reportedly ‘crypto-friendly’ bank – the UK-based Revolut – has also received a number of Reddit complaints, including this one:

“All my money is locked in my revolut account, I can’t even buy a bottle of water because i got no cash on me and these jerks are ignoring me for no reason. Please help me get in touch with them, I’m desperate.”

In other words, the problem is a general one, and similar complaints can be found for Wirex, Barclays, ING, Fidor, and Simple Bank, among others.

‘The quickest and cheapest strategy’

Legally, what can a customer do if their account is frozen by their bank? In terms of taking specific legal actions, the disappointing answer to this question is: nothing.

“Clearly, any answer is case specific and depends on where the bank and customer are based,” says James Kaufmann, a lawyer specialized in blockchain and cryptocurrency at Howard Kennedy. “But in a general context, as I see it, if a bank blocks an account because it feels it is appropriate to carry out further AML/KYC checks (and bear in mind that source of funds and wealth are things that need to be considered here), there is little that a customer can achieve effectively and reasonably by resorting to legal action to force the bank to release those funds.”

Still, Kaufmann advises that customers take the practical step of contacting their bank wherever possible and of cooperating with them to get the account back online.

“In my experience, the better course of action is to find a friendly and engaged contact at the relevant bank and seek to work with them to help them conclude their process as soon as possible,” he tells Cryptonews.com. “This is usually the quickest, cheapest and most effective strategy. Legal action will be time-consuming, costly, labor intensive and there is limited likelihood of success unless the bank is wilfully refusing to release funds or not following a reasonable and appropriate procedure.”

But yes, assuming that the bank is wilfully refusing to release funds and has no legal grounds for doing so, then legal action may very well be viable. Felix Shipkevich is a lawyer with Shipkevich in New York, and he tells Cryptonews.com that contacting the regulator is your best bet.

“If the cryptocurrency exchange is regulated, customers who are unable to withdraw their funds should immediately contact the regulator where their account is papered,” he says.

Given that banks are also regulated, much the same applies if your bank is preventing you from withdrawing your money.

But Shipkevich adds, if the company is not regulated, “then contacting law enforcement authorities should be the next best action. Unfortunately, civil legal actions may not be successful, particularly if prosecuting and enforcing judgments are likely to be challenging.”

It almost goes without saying, but it’s never a good idea to deal with an unregulated bank, so it’s unlikely that most people will ever find themselves in such a situation. Still, contacting the relevant financial regulator and asking for advice, in cases where your bank is being consistently unhelpful, is usually a good idea.

And in the end, even if you end up having your account unfrozen, it also might be a good idea to switch banks. Assuming that you can find one with a better reputation for treating customers who deal with cryptocurrency more fairly. In the meantime, let’s hope that hyperbitcoinization will arrive sooner than expected, removing all middlemen who can control your money.

More Articles

Price Analysis
Will Trump’s Tariffs Boost Bitcoin: Down 5% Again
Arslan Butt
Arslan Butt
2025-02-08 14:39:24
Price Analysis
Solana Struggles: Price Down Almost 15% in a Week – Is It Time to Buy?
Arslan Butt
Arslan Butt
2025-02-08 13:22:54
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors