On Thursday (May 2; 15:55 PDT), David Schwartz, the Chief Technology Officer (CTO) at Californian FinTech firm Ripple, said some time ago his primary bank, MUFG Union Bank ("Union Bank") had closed all of his accounts without any notice.
The Ripple CTO's comments about what had happened to him came after Ran Neuner ("@cryptomanran" on Twitter), the host of CNBC Africa's "Crypto Trader" show, as well as Co-Founder and CEO of Onchain Capital, said earlier in the day that his bank had contacted him because they were concerned about his crypto-related deposts and withdrawals:
The compliance department at my bank has asked for a call to discuss my Crypto related deposits/withdrawals-It’s as if I have engaged in criminal activity by buying Crypto. So for 2 hours today I will have to explain to a narrow minded idiot that buying Crypto is actually legal.— Ran NeuNer (@cryptomanran) May 2, 2019
Schwartz replied to Neuner to explain to him that things could be worse—Neuner's bank could have closed the accounts without any notice—and took this opportunity to remind people that this is why they should never do any crypto-related transactions through their primary bank:
I strongly recommend never doing any crypto related transactions from your primary bank. Having your main account that you pay bills from randomly closed on you is very annoying. You're lucky they're talking to you. Union Bank just closed all my accounts and told me later.— David Schwartz (@JoelKatz) May 2, 2019
Note that, according to a separate clarifying tweet (sent out roughly 50 minutes after the original version of this article was published) by Schwartz, what happened to him at Union Bank occurred "a couple of years ago," and the word "just" refers to him "getting no warning or opportunity to explain, not it being recent."
Schwartz went on to give more details on how Union Bank had behaved:
They may not tell you anything at all. I didn't find out until my online banking stopped working and when I called they told me my accounts were closed and a check for the balance was in the mail. Nobody would tell me anything else other than that it was a "business decision".— David Schwartz (@JoelKatz) May 2, 2019
Neuner and Schwartz are not the only prominent members of the crypto community who have experienced difficulties with their banks due to crypto-related transactions.
In fact, just one day earlier, Peter McCormack, the host and producer of the "What Bitcoin Did" podcast, said that when he was trying to open a bank account in the UK for his podcast business, he had been "rejected by 6 retail banks":
Operating a business which uses Bitcoin has come with challenges from the start, primarily getting banking services. I was rejected by 6 retail banks despite no mention of accepting Bitcoin in my application.— Dr. Peter McCormack (@PeterMcCormack) May 1, 2019
Would be interested in any experiences others have had similar.
Yep, I was rejected by:— Dr. Peter McCormack (@PeterMcCormack) May 1, 2019
And an online bank but I can't remember so I don't want to name them.
Of course, the reason that some banks are being ultra strict with their customers when it comes to crypto is concern over compliance with anti money laundering (AML) regulations.
Upon hearing about Neuner's banking woes, Justin Sun, the Founder and CEO of TRON Foundation, suggested that the Universal Declaration of Human Rights (UDHR) should be extended such that it includes the right to buy crypto:
Seriously, I believe we should petition the @UN to adopt buying crypto as one of the basic human rights in the #UDHR! Buying crypto is part of the Universal #HumanRights for EVERYONE in the world! https://t.co/r7fCuJxpNs— Justin Sun (@justinsuntron) May 2, 2019
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