Crypto’s standing has improved in recent times, but users still encounter issues with banks blocking their accounts when dealing with digital currency.
Across the world, it’s prevalent for cryptocurrency holders to have their accounts frozen or transfers disrupted, despite the growing institutional acceptance of crypto.
Panos Mekras, the co-founder and CEO of blockchain-based financial services firm Anodos Labs, shared his experiences in Greece where, during the late 2010s, banks seldom allowed transactions to crypto exchanges. After facing several rejected card payments, he was finally able to transfer funds through one bank, but only after being interrogated about the perceived risks of such actions.
Mekras informed Cointelegraph that such initial denials reflect the banking sector’s tendency to categorize digital assets as high-risk entities. This often results in sudden account closures or freezing of funds, compelling him to rely exclusively on blockchain payment solutions.
Despite an evolution in public perceptions of cryptocurrencies—transitioning from volatile assets to fundamental layers for future financial infrastructure—Mekras continues to face significant barriers from banks. As recently as a few months back, he recounted, he attempted to transfer money from a crypto exchange to Revolut, only to have his account frozen for three weeks, during which he lost access to his funds.
The Ongoing Challenge of Crypto Debanking
Mekras is not alone in his frustrations. A report from the UK Cryptoasset Business Council highlights that a significant proportion of bank transfers to exchanges face obstacles, with about 40% encountering restrictions, and 80% of exchanges noting increased difficulties over the past year.
Revolut has been cited as one of the few banks that allow for both bank transfers and debit card transactions, though it is also the same institution where Mekras faced his recent account freeze. Operated as a UK authorized bank under certain limitations, Revolut is currently enhancing its banking systems before a full launch.
A spokesperson for Revolut mentioned that account freezes are a measure taken as a last resort for customer protection, complying with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. They noted that from October 1, just 0.7% of accounts that received crypto deposits were frozen after investigation, indicating a low incidence rate.
In areas where banking services are restricted, users are forced to rely on peer-to-peer (P2P) platforms or even black markets for trading. For example, China remains stringent with its ban on crypto activities, pushing users into more extreme measures. Similarly, Nigeria previously prohibited crypto trading altogether but now recognizes digital assets within its regulatory frameworks.
Even in the US, similar issues have emerged, with regulators allegedly creating an environment discouraging banks from collaborating with the crypto industry. The term “Operation Chokepoint 2.0” has been used to describe these informal measures.
Major banks are starting to offer crypto-related products and services, including custody and trading options, reflecting a significant shift in the industry. However, friction remains largely due to a lack of internal frameworks within banks capable of properly processing blockchain data.
Mekras argues that users might consider completely bypassing traditional banking systems to manage their finances on blockchain platforms. However, in practice, many businesses still require dependable access to fiat systems for their operations.
