Transfers of money between banks, cryptocurrency exchanges and wallets can result in account freezes, withheld transfers, requests for documentation regarding the source of funds, or even the unilateral termination of the banking relationship.

At Ferrer-Bonsoms Lawyers, we advise on banking disputes involving cryptocurrencies and digital assets, particularly where a financial institution:

blocks an account after receiving funds from an exchange;
withholds a transfer linked to the purchase or sale of cryptocurrencies;
requests evidence of the source of funds originating from Bitcoin, Ethereum, stablecoins or other cryptoassets;
restricts or suspends banking activity;
requires additional documentation concerning wallets, exchanges or transactions;
unilaterally closes an account on the grounds of perceived risk associated with crypto transactions;
blocks funds linked to P2P transactions;
maintains restrictions for a prolonged period without providing a clear solution.

Each case requires an analysis of both the legal relationship with the bank and the origin, movement and traceability of the funds.

Bank blocks an account for cryptocurrency transactions: what can be done?

A bank account may be blocked when the institution detects transactions that it considers unusual or requiring additional checks.

In the context of cryptoassets, certain transactions may trigger internal compliance controls, particularly where there are:

transfers from cryptocurrency exchanges;
high-value deposits;
international transactions;
frequent inflows and outflows of funds;
transfers linked to P2P platforms;
discrepancies between the customer’s financial profile and the volume of transactions;
difficulties in reconstructing documentary evidence of the initial source of funds.

However, the mere existence of cryptocurrency transactions does not in itself make the funds unlawful.

When an account is blocked, it is essential to determine exactly what has happened, what information the bank is requesting, what documentation can be provided and what avenues of complaint or legal action may be available.

A rushed, incomplete or disorganised response may make the problem more difficult to resolve. It is therefore advisable to analyse in advance the transaction that triggered the review and properly reconstruct the source of the funds.

My bank is asking me to justify the source of cryptocurrency funds

One of the most common situations involves a request for information regarding the source of funds derived from the sale, conversion or transfer of cryptoassets.

The problem may arise when the customer has operated for years across different platforms or moved assets through several environments:

bank account;
centralised exchange;
personal wallet;
another exchange;
decentralised protocol;
conversions between different cryptoassets;
final sale and transfer of euros to the bank.

In such cases, a simple receipt for the final transfer may not adequately explain the economic origin of the funds.

For example, a transfer received from an exchange may only evidence the final step of a much broader chain of transactions. The bank may request additional information to understand how the cryptoassets were originally acquired, what transactions were subsequently carried out and how the final amount transferred was reached.

It may be necessary to reconstruct the entire sequence of transactions.

How can the source of crypto funds be evidenced to a bank?

The documentation required depends on the circumstances of each case.

Among other elements, the following may be relevant:

evidence of initial bank transfers;
historical exchange statements;
cryptocurrency purchase records;
deposit and withdrawal histories;
wallet addresses;
transaction identifiers or TXIDs;
transactions recorded on the blockchain;
crypto-to-crypto conversion transactions;
tax documentation;
tax returns;
contracts or other documents explaining the economic origin of the funds;
documentation relating to professional, business or investment activity.

The objective is not simply to accumulate documents.

It is necessary to build a coherent, chronological and legally defensible explanation of the source of the funds and their movement into the bank account.

In certain cases, it may be necessary to combine banking documentation, information provided by exchanges and data obtained directly from blockchain networks.

Transfer from a cryptocurrency exchange withheld by the bank

A transfer originating from a cryptocurrency exchange may be subject to review by the bank.

This may occur even where:

the exchange account has been properly verified;
the holder of the bank account is the same person as the holder of the exchange account;
the cryptocurrencies were lawfully acquired;
documentation of the transactions exists;
the funds have been properly declared for tax purposes.

In such cases, it is necessary to analyse the reason for the withholding, the information requested by the bank and the documentation available to evidence the source and movement of the funds.

It is also important to assess:

whether the bank has formally communicated any restriction;
whether there is a specific request for documentation;
what information has already been provided;
how long the restriction has remained in place;
whether other products or funds are affected;
and what financial consequences the restriction is causing.

Bank withholds a transfer originating from cryptocurrency transactions

Not all problems involve a complete account freeze.

In some cases, the bank allows part of the account activity to continue but withholds a specific transfer or prevents access to certain funds.

These situations may arise, for example, after:

withdrawing euros from an exchange;
selling Bitcoin or other cryptoassets;
converting stablecoins into fiat currency;
receiving funds following a long-term investment;
transferring significant amounts from a digital asset platform.

The legal strategy must be adapted to the specific type of restriction.

A transfer pending review is not the same as a complete account freeze, an operational restriction or a decision to terminate the banking relationship.

Bank account blocked due to P2P cryptocurrency transactions

P2P transactions can create specific problems.

When a person buys or sells cryptocurrencies directly with third parties, the bank account may receive multiple transfers from different individuals.

From the perspective of banking monitoring systems, this pattern may trigger additional reviews.

The risks increase where:

there are numerous senders;
transfers occur with high frequency;
bank transfer references are unclear;
a counterparty has been subject to investigation;
there is a fraud complaint;
the volume of transactions does not match the account’s usual profile.

In such cases, it is particularly important to analyse each transaction and properly reconstruct the relationship between the bank transfers and the cryptoasset transactions.

It is also necessary to assess whether any transfer originated from an unknown third party or from a person potentially connected to a fraudulent transaction, as such circumstances may significantly complicate the case.

Can the bank close my account because I trade Bitcoin or cryptocurrencies?

The closure of a bank account raises different issues from a temporary freeze.

Financial institutions may take certain decisions within the applicable contractual and regulatory framework, but each case must be examined individually.

Among other matters, it is necessary to review:

the account agreement;
communications sent by the bank;
the notice period granted to the customer;
the existence of blocked funds;
the transactions affected;
documentation previously provided;
the possible existence of linked products;
the financial consequences of the closure.

The use of cryptocurrencies does not eliminate the customer’s contractual rights or prevent the bank’s conduct from being subject to legal analysis.

In certain circumstances, it may be necessary to assess whether the bank’s actions complied with its contractual obligations, the applicable procedures and the customer’s rights.

Cryptocurrencies purchased years ago: difficulties in proving their origin

One of the most complex situations arises when cryptocurrencies were acquired many years ago.

It may be the case that:

the original exchange has closed;
complete statements are unavailable;
several wallets have been used;
the assets have moved through different platforms;
multiple conversions have taken place;
transactions have been carried out through DeFi protocols;
certain supporting documents have been lost;
the current value is significantly higher than the amount originally invested.

The absence of a single document does not necessarily mean that reconstructing the source of the funds is impossible.

It may be necessary to combine:

historical banking documentation;
exchange records;
emails;
tax information;
wallet addresses;
transactions recorded on the blockchain;
and other forms of evidence.

Each case must be analysed individually to determine what documentation exists and what transaction history can be reconstructed.

What happens if the exchange where I bought the cryptocurrencies has closed?

The closure of an exchange may make it more difficult to prove the source of funds, particularly where the user can no longer access their complete transaction history.

However, other sources of information may exist.

For example:

bank transfers made to the exchange;
confirmation emails;
deposit and withdrawal records;
wallet addresses;
on-chain transactions;
tax documentation;
screenshots or historical files;
subsequent movements to other platforms.

The feasibility of reconstructing the transaction history will depend on the available documentation and the specific characteristics of the transactions.

Personal wallets and proof of source of funds

The use of a personal wallet may add complexity to the process of evidencing the source of funds.

A blockchain address does not necessarily contain the name and surname of its owner. It may therefore be necessary to establish the connection between a person and specific addresses or transactions.

In such cases, elements including the following should be analysed:

withdrawals from verified exchanges to a wallet;
subsequent deposits from that wallet;
chronological continuity of transactions;
TXIDs;
movements between addresses;
supporting documentation;
and the overall consistency of the transaction history.

Technical traceability may be relevant, but it must be integrated into a comprehensible legal and documentary explanation.

Stablecoins and bank account freezes

Stablecoin transactions may also trigger requests for information.

A user may have operated with assets such as USDT or USDC over an extended period before converting them into euros and transferring them to a bank account.

In such cases, the final euro transfer may merely be the last step in a chain of previous transactions.

It may be necessary to explain:

how the assets were originally acquired;
what conversions took place;
on which platforms;
from which wallets;
over what period;
and how the final amount transferred was reached.

Our legal advice on disputes between banks and cryptocurrency users

At Ferrer-Bonsoms Lawyers, we analyse disputes arising from the relationship between banks, customers and digital asset transactions.

Our legal services may include:

legal analysis of the account freeze or restriction;
review of communications from the bank;
assessment of the available documentation;
source-of-funds analysis;
chronological reconstruction of transactions;
analysis of the relationship between banking movements and crypto transactions;
coordination, where necessary, with specialists in blockchain transaction tracing;
preparation of responses to bank information requests;
complaints and claims against the bank;
assessment of potential legal proceedings where appropriate.

The objective is to address the problem from an integrated perspective: banking, contractual, evidentiary and digital asset-related.

Banking experience and knowledge of the crypto ecosystem

Cryptocurrency-related disputes are not merely technological problems.

They are often also banking, contractual, evidentiary and regulatory disputes.

At Ferrer-Bonsoms Lawyers, we have extensive experience in banking litigation and disputes between financial institutions and customers, combined with a specialised practice in blockchain, cryptoassets, tokenisation and digital assets.

This combination enables us to address disputes between banks and cryptocurrency users from a comprehensive legal perspective, connecting areas that are often analysed separately:

the contractual relationship between the bank and the customer;
the applicable banking and financial regulations;
procedures relating to controls and source-of-funds verification;
transactions involving exchanges and wallets;
the traceability of cryptoasset transactions;
the evidentiary documentation required;
and potential avenues for complaints and claims against the bank.

Our approach is based on a practical reality: when a bank blocks an account, withholds a transfer or requests evidence of the source of cryptocurrency funds, the problem cannot be resolved solely through knowledge of blockchain technology or exclusively through traditional banking law.

Both environments must be understood.

We therefore analyse each case by examining both the conduct of the financial institution and the origin, movement and documentation of funds linked to digital assets.

What should you do if your bank has blocked your account because of cryptocurrency transactions?

If your account has been blocked, a transfer has been withheld or the bank requires you to justify the source of crypto funds, it is advisable to preserve and organise all available documentation.

Before providing an incomplete or disorganised response to the bank, it may be advisable to analyse:

which transaction triggered the review;
where the funds actually originated;
what route they followed;
what documentation exists;
what information is missing;
what exactly the bank has requested;
what explanations have previously been provided.

It is also advisable to retain all communications with the bank, including:

emails;
internal online banking messages;
requests for documentation;
responses submitted;
proof of delivery;
notices of account freezes or closures.

An appropriate response must be tailored to the specific circumstances of the case.

Legal consultation regarding cryptocurrency-related bank account freezes

If your bank has blocked an account, withheld a transfer or requested evidence of the source of cryptocurrency funds, you can contact Ferrer-Bonsoms Lawyers to analyse your case.

We will assess the available documentation, the conduct of the bank, the source and movement of the funds and the possible courses of action.

Contact our law firm for an initial assessment of your case.

Frequently asked questions about blocked bank accounts and cryptocurrencies

Can a bank block an account for receiving money from an exchange?

A transfer originating from an exchange may trigger additional checks or requests for information. The legality, scope and duration of the measures adopted must be assessed in light of the specific circumstances of each case.

What should I do if the bank asks me to justify cryptocurrency funds?

It is advisable to identify the initial source of the funds and reconstruct their movement through to the final transfer. Depending on the case, bank statements, exchange histories, wallet data, TXIDs, tax documentation and other evidence may be used.

Is providing an exchange statement sufficient?

Not always. An exchange statement may evidence part of the transaction history, but the bank may request additional information concerning the initial economic source of the funds or previous movements.

Can I make a claim if the bank keeps my account blocked?

It depends on the circumstances, the communications issued by the bank, the documentation provided and the nature of the restriction. Each case must be assessed individually.

Can cryptocurrencies purchased many years ago be properly documented?

In some cases, yes, although the reconstruction may be complex. It may be necessary to combine banking documentation, platform records, tax information and blockchain traceability.

What happens if the exchange where I bought the cryptocurrencies has closed?

The closure of the exchange may make it more difficult to provide evidence, but it does not necessarily make it impossible. Other available documentary and technical sources should be analysed.

Do you handle cases involving blocked transfers from exchanges?

Yes. We analyse cases involving transfers originating from exchanges, requests for evidence of source of funds, banking restrictions and other disputes linked to digital asset transactions.

Can you help prepare a response to the bank?

Yes. Depending on the case, we analyse the request received, the available documentation and the appropriate way to present a coherent explanation of the source and movement of the funds.

Is it possible to take legal action against the bank?

This will depend on the specific circumstances, the type of freeze or restriction, the conduct of the bank and the available documentation. Each case requires an individual assessment before potential legal proceedings can be considered.