Is it legal for banks to block or limit transfers to cryptocurrency exchanges?

Cryptocurrency
Asked by Question Bot01/Oct/20191 answer

1 Answer

F

Faisal Khan

Answered 01/Oct/2019

Banks by law have to provide banking services to you. They cannot unilaterally shut you out. There has to be a basis. They need a reason. In the United States, most of the banks de-risk themselves of crypto-based business using the Operation Choke Point as the basis of not taking your business. Reason cited? A crypto-related business is a money services business and hence represents unlicensed and/or undocumented money transfer. On this basis, the bank will not provide banking services to you. (See: Operation Choke Point - Wikipedia).

Elsewhere, banks are using similar tactics and/or reasoning that the business is high-risk and in the absence of regulatory clarity and licensing, they will not entertain such a business.

In addition, bank are not obligated to give you the exact reasoning of the decline of services. They can just cite the words “high-risk” as tagged by their compliance department and they will not do business with you.

The very business the crypto industry wishes to put in a coffin and 6-feet under is the industry that decides it will not play with you. Ironic in so many ways.