Avoiding Bank Account Suspension Due To Bitcoin Transactions

Various banks around the world take drastic action when they find out customers have been using their account to buy or sell Bitcoin. In most cases, bank accounts will be closed without notice or second thought, leaving customers hanging out to dry. When this scenario happens, there is very little a consumer can do,  other than finding a more Bitcoin-friendly bank.

Also read: Bitcoin Offers A Chance For Increased Purchasing Power, Unlike Fiat Currency

Bank Account Closed Due To Bitcoin

TheMerkle_Bank Account BitcoinMultiple Bitcoin users – most notably in the United Kingdom – have been faced with the suspension of their bank account simply because they once bought or sold Bitcoin. Most banks around the world are not too keen on the concept of Bitcoin altogether, and customers using their accounts to get involved in digital currency can have their account flagged at any given time.

The worst thing is that this is not the fault of the consumer per se, as they will hardly ever tell their bank about Bitcoin intentions to begin with. However, once they buy or sell Bitcoin through that bank account, a transaction may contain a message field stating the word ‘Bitcoin”, which will set off internal alarms.

It is important to keep in mind not just every bank in the world will take these actions, as there are various smaller banks who are not too worried about Bitcoin transactions just yet. However, the bigger banks may close down an account without any prior notice, and moving funds out of that account can be quite a difficult challenge.

There are several ways to circumvent this issue, for example by making a cash deposit to any UK bank and ask them to transfer the funds to one particular Bitcoin exchange’s account. Another option is to change to a smaller bank – or setting up a separate account just for Bitcoin purposes.

It is hard to judge whether this problem is linked to the term “Bitcoin” in a message field when making or receiving a transaction, or whether it is because a plastic card linked to that account has been linked to a Bitcoin service. For example, when adding a debit card linked to one’s bank account to a Coinbase account, it might get flagged internally by the bank as well.

Finding a Bitcoin-friendly Bank

TheMerkle_Bank Account Fidor Bank

One popular alternative is finding a bank that is more open towards the idea of Bitcoin and digital currency. Unfortunately,  it is impossible to guess which banks are more open-minded compared to others in that regard, as this will usually have to happen through trial and error. Not something a lot of people are looking forward to by any means.

Fidor Bank presents an excellent alternative, in this regard, even though their services are limited to the United Kingdom and Germany for the time being. However, for those UK customers, opening an account with Fidor Bank will definitely help, as they are far more open-minded when it comes to Bitcoin.

Source: Reddit

Images credit 1,2,3

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Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. The information does not constitute investment advice or an offer to invest.