The Impact of Recent Bank Account Freezes on UK Crypto Professionals

There has been an increase in bank accounts belonging to crypto professionals being frozen or restricted across the UK, US, and EU over the past few months. They say you often don’t care about something until it happens to you; well, this week, it did. To my genuine surprise, it came from the one place I least expected it.

Revolut has long been regarded as the most crypto-friendly bank in the United Kingdom, offering in-app crypto purchases and, in 2023, finally adding the ability to send and receive crypto, albeit with certain limitations. However, recent events have called into question the bank’s commitment to providing a seamless experience for its cryptocurrency-using customers.

Despite the UK no longer being part of the European Union, under which MiCA EU regulations apply, the newly implemented Travel Rule requires similar disclosures. This means that users are now required to reveal and identify the owners of any unhosted wallets that are the recipients of withdrawals from Revolut.

However, UK crypto firms are allowed to apply a risk-based approach to determine when they should gather information on unhosted wallets. They simply need to have the capability to identify where their customers are transacting with unhosted wallets and assess the riskiness of those transactions.

How the UK’s most crypto-friendly bank froze my account of 0.23ETH

Two days ago, I purchased a modest 0.23 ETH (£550) through the Revolut app and attempted to transfer the funds to my personal Ethereum wallet, which is linked to a well-known ENS domain. To my surprise, Revolut blocked the transaction and took fees from the account. Moreover, my entire bank account, including a joint account with my wife, was frozen.

After several hours of frustration and confusion, the account was eventually unfrozen, and fees were refunded after a further request. However, the specific wallet address remains blocked, preventing me from sending funds to that account. This experience has left me…