Despite increasing adoption by institutions around the world, it is still common for cryptocurrency users to have their bank accounts frozen and money transfers blocked.
Panos Mekhlas, co-founder and CEO of blockchain fintech Anodos Labs, started working with cryptocurrencies in Greece in the late 2010s. At the time, most banks in Greece did not allow transfers to crypto exchanges. Mekhlas experienced card payments being blocked until a bank finally allowed the transfer, but he was first questioned to ensure he understood he was dealing with a “dangerous” counterparty.
Meklas told Cointelegraph that these early rejections are a sign that banks treat digital assets as inherently high risk. That label often led to account closures or sudden freezes without explanation, and ultimately led to his business relying solely on on-chain tools and payment rails.
Since then, public perception of cryptography has evolved. Cryptocurrency is currently being reimagined from a speculative asset class to an infrastructure layer for future financial products. But Meklas said he’s still experiencing the same bank barriers he encountered just “a few months ago.”
“When I tried to transfer money from an exchange to Revolut, my account was frozen for three weeks. I couldn’t access my (funds) during that time.”
The long shadow of crypto debanking
Meclas is not the only crypto holder with such complaints, even as banks announce expanded custody and blockchain efforts.
Bank transfers to exchanges are blocked or delayed, with around 40% of payments facing restrictions and 80% of exchanges reporting increased friction over the past year, according to a January report from the UK Cryptoassets Business Council.
The council warned that blanket bans and trading restrictions often apply regardless of an exchange’s legal status.
Revolut is one of two banks in the UK Parliament’s inquiry that allows both bank transfers and debit cards, and is also the platform where Mr Mekhlas claims he recently experienced an account freeze. The company operates as a UK chartered bank on a “limited basis” and is currently building its banking processes ahead of a full-scale launch. It also holds a European Union banking license through Lithuania and offers virtual currency trading services on its app.
A Revolut spokesperson told Cointelegraph that the account freeze is treated as a “last resort” customer protection measure in compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations.
“A temporary freeze may occur if our systems detect irregular activity. This may be due to a combination of factors, including if the customer interacted with a platform that is frequently abused by fraudsters or if we believe the funds in question may be the proceeds of crime or sanctions evasion,” the spokesperson said.
The representative added that since October 1, just 0.7% of Revolut accounts where customers have deposited crypto funds have been restricted or frozen as a result of the investigation.
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When banks close, users move on-chain
Cryptocurrencies are blocked in some regions, exposing users to stricter restrictions. Since cryptocurrency on-ramps and off-ramps are not legally possible in regions like China, users rely on peer-to-peer (P2P) platforms and black markets to trade cryptocurrencies.
China is at the extreme end of this spectrum, but other jurisdictions have relaxed formal and informal restrictions. Nigeria has previously banned cryptocurrencies and also blocked P2P platforms. However, it officially recognized digital assets as securities in 2025.
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A similar pattern of bank frictions has emerged in the United States. Lawmakers and the industry have brought up the term “Operation Chokepoint 2.0” to describe federal regulators’ informal guidance that prevents banks from maintaining relationships with crypto companies.
The original Operation Chokepoint was an effort in which enforcement agencies were accused of pressuring banks to cut ties with politically controversial industries such as payday lenders and gun dealers.
Donald Trump took office as President of the United States in January 2025, and has been promoting cryptocurrency-friendly policies in order to position the world’s largest economy as the world’s “cryptocurrency capital.”
Since then, the issue of crypto debanking has become officially recognized. In December, the U.S. Office of the Comptroller of the Currency (OCC) released the results of an investigation into the debankment practices of nine of the nation’s largest banks. The OCC also issued an interpretive letter confirming that banks may facilitate virtual currency trading in a broker-like capacity.
Despite the positive momentum, users are still dissatisfied with the banking sector not servicing accounts exposed to cryptocurrencies.
“This remains the case, and anti-crypto positions still exist. Some have even publicly stated that they have no intention of supporting crypto activity or being involved in the industry,” Meklas said.
Mekulas argued that users can consider completely decoupling from traditional banking systems and moving their finances on-chain. While it seems possible in theory, in practice most companies and users are still unable to operate purely within cryptocurrencies without reliable access to fiat rails.
Transforming the banking industry to blockchain infrastructure
In recent years, there has been a global shift in the way traditional financial institutions approach cryptocurrencies.
Large banks and financial infrastructures are increasingly building products and services around Web3. In the US, 60% of the top 25 banks reportedly offer or plan to offer Bitcoin-related services such as custodial, trading, and advisory solutions.
Across Europe, regulated services such as storage and settlement of cryptocurrencies are being introduced by traditional exchanges and financial groups under the Markets in Cryptoassets Regulation (MiCA). In the UK, HSBC’s blockchain platform has been selected to support a pilot issuance of tokenized government bonds.
In the context of this introduction, some companies working on bridging banks and blockchain argue that the challenges leading to account freezes are related to gaps in tools and risk frameworks within banks.
“The problem is that traditional banks don’t really have the internal infrastructure to interpret blockchain data in a way that fits within their existing risk and compliance frameworks, which creates a lot of friction,” Eyal Daskal, CEO of Crymbo, an institutional blockchain infrastructure platform, told Cointelegraph.
He explained how banks often fail to take precautions because they lack the ability to connect on-chain activity with the identity and compliance signals they rely on.
“If cryptocurrencies are involved, they block the account and treat it as ineligible. They don’t have the tools to properly evaluate it, so this is the easiest option.”
Cryptocurrencies are entering the financial mainstream, but for many users, access to basic banking still depends on banks’ risk engines being able to understand what’s happening on-chain. Until this gap narrows, industry institutional acceptance and retail frictions may continue to coexist.
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