In a chilling but sadly all-too-familiar sequence of events, UK banks have been targeting cryptocurrency owners. Individuals who have cashed out large amounts of cryptocurrency – legitimately – have had their assets frozen and accounts locked without warning, fueled by fears of money laundering and a general distrust of bitcoin. One victim even claims to have had their house raided and computer equipment seized in a follow-up operation by UK police.
The Legacy Banking War on Cryptocurrency Ramps Up
Traditional finance and cryptocurrency have been uneasy bedfellows ever since the start, but it didn’t have to be this way. While some jurisdictions have belatedly welcomed cryptocurrency with open arms – think Gibraltar, Malta, and Liechtenstein, where Binance has just opened a fiat-crypto exchange – the majority have taken an antagonistic stance. The UK is a prime example; unless you’re a bigshot like Coinbase, which recently secured a deal with Barclays, don’t count on retaining access to a bank account if you dabble in crypto. On P2P site Localbitcoins.com, UK traders exchange large amounts of BTC every day, requesting, in most instances, that the bank pay-in reference is something benign and unrelated to crypto. To do otherwise is to play a dangerous game.
This week, one British cryptocurrency figure discovered, to his peril, the speed and severity of the crackdown that’s initiated once a UK bank deems an individual to be persona non grata. The man, who we’ll refer to as John, has been involved in cryptocurrency for many years, actively mining it, occasionally trading it, and operating as a senior figure in the project team for a top 100 cryptocurrency. He has no criminal convictions, and has always accorded to UK laws concerning financial regulations and taxation. He told news.Bitcoin.com:
I had my bank account frozen and my funds taken hostage by Clydesdale Bank without any warning or explanation…I was eventually told by the branch manager that it no longer wanted to do business with “these type of people” [i.e cryptocurrency users]
Locked Out Without Warning
John explains: “I tried to log in to my Clydesdale Bank current account (the one that I’ve had since childhood) late on Tuesday evening only to be presented with a message saying “Sorry, we’re no longer able to assist you online”. I then tried the app which said “Your account is locked, please call”. I called the help center only to be told that the guy on the other end of the phone also couldn’t access my account nor confirm whether or not my (six-figure GBP) balance was safe. I was told that he was completely unable to help and that I would need to call HQ in the morning.”
He continues: “I called HQ this morning and was put on hold for 20 minutes. When the guy came back, he told me that there was a letter in the post to me and that he couldn’t say anything more about what was happening or whether or not my balance was safe. So I requested to be put through to the most senior person available, who then told me that my account had been locked down but he was unable to tell me why, nor who put the lock on my account. He refused to even tell me which department placed the block. He told me that my only option was to go into my local branch and request a manual withdrawal of funds. However he explained that such a withdrawal would need to be approved by the bank and therefore I wasn’t guaranteed to get access to my cash.”
“My local countryside branch were as clueless as you’d expect. I sat watching the assistant phone head office to try to get to the bottom of WTF was happening. HQ refused to tell her while I was present so they instead went cloak and dagger by sending an email which she had to leave the room to go and check out. After another 20 minutes and a couple of phone calls that I could hear her make from the room next door, she finally reappeared with another guy who turned out to be the branch manager.”
“These Types of People”
John explains: “The branch manager sat down and explained that the bank had reviewed the transactions coming in and out of my account and decided that it no longer wanted to do business with “these type of people”. I immediately requested full withdrawal of my not insignificant balance to which he replied that he would need to seek approval for that to happen.”