Bitcoin Forum

A financial analyst from us bank called me today to tell me that my account will be closed because of funds being deposited into my account through zelle were deemed as fraudulent. They are also going to take away any money i made. So essentially I'm going to be losing a ton of money. This is my only bank account and I have no idea what to do. Sites like paxful are completely legal. I was vending bitcoin and making transactions through zelle, only releasing bitcoin after funds were deemed as deposited. How is this possible? How was I supposed to know that the money coming in was fraudulent?



***Update: so at this point the only way i can get access to the bank account is if the branch manager where I first enrolled with us bank lifts the lock. I am calling her tomorrow, which is in a few hours. Any suggestions on how I should I approach the phone call?

What most do not do is seek information from a bank before such transactions, as some banks have very strict rules and do not support services like Zelle. As for the money it might be "fraudulent", of course you can't know in advance that it's money that will cause you problems - but it’s a risk you take when doing business with strangers. They use a variety of money laundering methods, and one of them is Paxful, where BTC can be purchased by various methods with money that can come from illegal sources.

It is best to be honest and explain the situation, unless the BTC you are selling does not have legal coverage or if you don’t want the bank to find out at all that you have anything to do with BTC. To begin with, try to save the money you have in your account - and then go in search of another bank, preferably one that will not cause you problems with such transactions (if such exists at all in the USA).

They don’t usually confiscate funds, a lot of banks don’t like involvement with crypto but I’d be very surprised if they take your money. It’s more likely they will shut your bank, give you your money & tell you to bank elsewhere.

What I’d suggest is to provide receipts & records of where you initially bought your bitcoin. They shouldn’t be aboe to do anything then.

Ask for an explanation with regards to their "fraud" accusations? I mean, yes banks are kind of against the adoption of cryptocurrencies and all but that shouldn't warrant them doing something like preventing you from accessing your own funds. If they state it's in their T&A then you can probably ask them to refund a percentage ( the part that didn't really came from Paxful ) and call it quits then. I really doubt they'd let you get the entire funds from your bank account if you really did violate any of their rules.

You were doing business through a personal bank account. You were money transmitting without a licence or checking anything about where customer money was coming from or where it was going. Those are exceptionally dim moves.

A bank would get its arse fined off operating that way. Why would they let a customer do it?

I don't see how any bank can keep your money unless law enforcement is somehow involved. Go and ask someone legal.

There is no way to know if the money you are receiving is fraudulent and If the decision was taken by the central transaction monitoring team of the bank, the manager wouldn't be able to do anything. She will probably give you a phone number or an email id to Register your grievance.

However, they won't probably take out all your funds. Just you need to prove the legitimacy of the funds to them and move out your business to elsewhere. All the best!

Firstly, you have to contact zelle to inform them about what has happened to the money that was transfer to your bank account through them and demand an explanation. I suppose zelle is legally registered in United State. If the United state have a database of registered business directory, kindly check and write down the registration information of the zelle. Tomorrow when you call the woman at the Bank, try to be calm and explain to her that you never expect that zelle will send a fraudulent money to your account that the reason you are using zelle is because they are legally registered company and you never thought they will be involved in any thing shady business. you can present the woman the business registration detail of zelle. Finally try to convince the woman that you will never associate yourself with zelle henceforth, and that they should please unblock your account.

what happens in most cases is that the 'zelle' account was highlighted prior by other customers.

many banks have found that when people buy bitcoin(deposit funds into zelle) those customers then pretend that some theif hacked their bank account and sent money to zelle
so this means the person gets bitcoin and his funds back from zelle

zelle loses out. as do the people who sold coins who find out their funds are reversed

I think you sold bitcoin to someone who hacked a bank account and send money from their so that hacker can get away with your bitcoins while you become the actual fraud in the view of this world.

Can you say about the price margin you sold? If it is premium rate like 30% or above then this is much likely linked to hacked accounts.

@healthnut69

For this kind of activity, it is safer and more convenient to open a bank account used for the sole purpose to sell cryptocurrencies. And as with exchanges platforms, to no store a lot of funds in.

Because if one day the bank suddenly decides to suspend your account, it won't be a big deal because you have other accounts. Above all, you won't be stuck without an account to pay your bills to receive salaries, which can give additional troubles you don't want to have, especially if you have a family.
If the money really needs to be reversed they won't be able to take your money as easy since you don't keep money in this account.

Tell her the truth because lying doesn't pay and she might be able to help to counter the fraud. Explain you have some proofs to back up your claims etc.

1. It is possible that the funds were sent to you from a hacked or stolen bank account.
2. It is possible that the buyer lied to get their money back.
3. There is a common scam called a man-in-the-middle scam (by traders). It works like this:

• A. Scammer pretends to be selling something for X dollars and finds a buyer, Alice.
• B. Scammer contacts you and agrees to buy bitcoins for X dollars.
• C. Scammer tells Alice to send X dollars to your bank account.
• D. You receive X dollars from Alice and you release the bitcoins to Scammer.
• E. Scammer disappears with your bitcoins.
• F. Alice knows your account number and believes that you are the scammer.

The way to avoid these situations is to get KYC information from your buyers and/or to check the sources of the funds sent to your bank account before releasing the bitcoins.

You'll likely have to go to the branch itself, and explain what sort of trades you've been involved in, and they'll bring up any issues there, and then. As mentioned, its probably due to the fact that someone has been using stolen funds to purchase your Bitcoin. Unfortunately, this isn't your fault, and they'll probably just want to check how this happened, and have "closed" the account as a precaution. I imagine they've simply just locked the account, until they can verify you are who you say you are, and that there was legitimate business reasons for the stolen funds entering your bank account.

They may require you to open a business account as depending on their polices frequently trading cryptocurrencies or any currencies for that matter would likely fall into the business category. You shouldn't have any issues with getting the account opened again as long as you can verify the information they require.

****Update 5/21/2020: I called the branch and they said the manager isn't going to be available till tuesday because she's on vacation. I have rent due on saturday so I told them if we don't remove this lock I'm going to call the police.

*****Update 5/21: One of the local branch manager stepped in and gave me a call back. Did not go well. Said that a decision has been already made to close the account. I asked him by who and when and he just kept saying a decision has been made to close the account over and over again. I called into support and they said they don't see a decision noted on the account yet. Maybe I should wait for the original branch managers to get back from vaca?

Did they tell you that they suspected suspicious activity? Because my bank did just that.

I believe decision will not change if it has done. But it would more better to meet with original branch manager and talk regarding your problems. Even they closed your account money should return to you. Money isn't belongs to them. Is a signle transaction looks suspicious then why they didn't prevent it to make deposite on your account? This isn't appropriate action to seize all your money. What if someone from my enemy make illegal transactions to my account? Isn't it matter of investigation? If really they closed and seize your funds then call the police.

OP has made big mistakes, this is normal thing that you don't know anyone over internet where you are trading bitcoin. So you will not able to make sure if they are involved with fraudulent. But you may avoid some services those aren't accepted by banks and you should know it very well and you would ask your clients which methods aren't acceptable to you.

Second mistakes is, since this account with related with crypto currency then you shouldn't keep your all money on that bank account. You should have some other banck account on different banks rather than use just a single account. You should move all your funds from this account after made deposits. However, I am not familiar with your country banks. You may hire a legall advisor from your local country to get perfect advise and take appropriate action as well.

This.

You try to pulled off something that banks often dislike, and that is acting as a money transmitting service without the necessary license PLUS under a personal bank account which is possibly limited to just doing personal transactions. By doing so, you violated their terms and put them off in a bad position. Nevertheless, I think they'd be open for a discussion regarding what happened to your account, but the banks would and should not keep any funds gained on your account. They'd might just give it back to you and get you going with a warning, or even suggest that you open a business account instead.


Waiting is your best option. I don't have a very good history with managers directing my problem to someone else who doesn't know the nature of my problem. It always doesn't end well.

Don't wait for the manager, just visit the branch and ask them for the real reason. Its your money right so you have all the rights to ask any question and they are obliged to give answers, if they ignore our queries then ask for account closure on yourself then let's see what happens.

Banks are under no obligation to tell you why they've given you the boot. Sometimes it against the law to tell people why.



Why would the police give a shit? At most it's a civil matter. When you handed your money to the bank you handed control of it to them too. Whatever the outcome is it's going to run to their timing.

Don't fret mate, how about you pay a visit to your bank and make some inquiries yourself. I believe they can look it into it. Maybe they are not really open to making crypto transactions through their account. I think the best they can do is to fine and later warn you of such transactions as it may be against the company's rules.

They don't have the power or right to issue fines. The most likely scenario is that OP will get his money back after a period of time that's too long for his liking and then will be told not to come back. The only circumstances where I can see money being kept is if law enforcement gets involved and whatever money can be linked to something nefarious.

if the money was sent fraudulently, won't it be clawed back by zelle and the sending bank?

either the sender gets refunded (classic BTC for reversible payment method scam) or OP gets his money back. it can't be both. i hate to say it, but my money is on the payment getting reversed and OP permanently losing his account.

this is why i only deal in cash when it comes to p2p trading. it's too risky giving up precious bitcoins for reversible online bank transfers.

Update 5/22: Received this notification from coinbase today: "Your recent purchase failed. Until resolved, your ability to trade and transact is disabled.After 5 days, we will automatically sell cryptocurrency in your account to collect any outstanding payments." This is regarding me trying to buy 1000 worth of bitcoin through ach transfer earlier this week before lock happened. I spoke with a us banker and she said that the 1000 is still posted as paid on my account. If it didn't go through coinbase, wouldn't it be credited back to my bank account? Also received an email from coinbase today: "Due to suspicious activity on your account, we have increased the holding time before you can withdraw your funds by 9 business days. This is meant to protect you against fraud by ensuring that you authorized this purchase. No action is required on your part." I am confused as to what coinbase has to do with any of this other than me simply buying bitcoin on there.

There are a few of you that recommended I stop into the bank in person. I am not in Iowa. I am in Washington state. The only way i can contact original branch is over the phone. That branch manager is gone till Tuesday. However, that branch had me speak with one of the local branch managers, who i spoke with today, and he said that the decision has been made to close the account and he doubts that me speaking with original branch manager is going to change anything based on the info he's gotten from efraud. Iowa branch manager said hold could take some time because they are investigating all the transactions made. There were 11 of them made over a four day period.

I was on the phone with local Washington state banker while on the phone with iowa branch manager through conversation. Washington state banker suggested for iowa branch manager to reach out and email original branch manager which he ended up doing. Other than suggesting that there's probably nothing the original branch manager can do and suggesting that it will may take sometime for investigation, that was the end of the conversation.

Washington state banker also reached out through email and text to operations manager in washington state region to see if there's anything else we can do. She also reached out original branch manager through email in iowa to see if we can reach her before Tuesday. Ultimately we're trying to get funds released as soon as possible since theyve decided to close the account.

Looks like we're gonna have to wait till Tuesday.

You are of course righter than right.

For some reason I totally discounted the most obvious angle - OP being scammed by a buyer. In that scenario the chances of salvaging any money are way, way lower unfortunately.

The combo of unauthorised business use, lack of KYC and having to deal with payment reversals makes for a properly toxic customer.