Bitcoin Forum

Hi All

I'm new to the forum although have been lurking for a while!  Hoping to start my crypto investment journey this year.

As part of my investigations into starting up, I've discovered my bank (which I don't want to leave) has banned its customers from using credit cards for crypto exchange and broker transactions.  On further investigation it seems debit card transactions are also increasingly being blocked.  Some customers have had their accounts closed which I obviously want to avoid, especially if this then affects things like credit ratings.

This got me thinking and I'd be grateful if those more knowledgeable than me could answer my questions below :)

1.  Brokers such as eToro trade in more than crypto e.g. stocks, currencies.  So if I transferred money directly from my bank to a company such as eToro which isn't exclusively crypto, is this likely to be flagged as a banned company from my banks perspective, or is my transaction likely to go through without any queries?  Also, if eToro is then transferring funds back into my bank account, is this likely to be queried?  I'm wondering if my bank has the right (I think they probably do?) to ask what I'll be using eToro for and/or what the incoming eToro funds were generated from.  If that question was posed to me, I wouldn't want to misinform them by saying 'oh it was trading in stocks' when in reality it came from trading in crypto.

2.  To avoid this, am I better to use something like PayPal for my crypto transactions?

3.  If you're comfortable sharing this information, what method do you use for your outgoing and incoming crypto transactions?

Thanks all :)

eToro is a established broker like many others around the globe. I see no reason for your bank to consider this as a shady activity since you're basically deciding to take part of your liquidity and use it to invest in the financial produts that are offered by eToro (that can range from stocks, Exchanged Traded Funds and others).
It doesn't make sense for your bank to ask you where the funds came from (because they know that they came from eToro in this case). In my country, for example, you are responsible for presenting your capital gains at the end of your fiscal year (whether you send the gains to your bank account or let them sit at a broker like eToro). So if you decide to cash out your investments to your local bank you should basically do the right thing and report them in your tax reports (assuming that crypto is taxable in your country - I ask you to look for further information on this one).
At the end of the day it's your money you're talking about. If your bank starts putting restriction on how you should use YOUR money then I would seriously look for another alternative.

I advice strongly against using PayPal (or even Revolut if you're from Europe) for your crypto transactions. The reason is quite simple : They don't let you withdraw your investments (BTC, LTC for example) to a wallet of yours. So you're basically stuck with your investments in a platform that only allows you to trade in their environment which is, by itself, not the wisest decision you could make.

In your case, considering you've just arrived to this "world" I would try to create an account at established exchange and do whatever investments you have planned. The main ones are either Coinbase, Kraken or even Binance.
Whenever you can (and considering the amount invested) always try to move your investments out of any CEX (centralized exchange) you may end up using.

My country has also banned the conversion of Crypto-currency into your local bank account, recently but before the banned, I have always made use of peer 2 peer, it's more like a service to me, and I haven't had any reason to regret it, because I peer with trusted person that has a service on the forum, and I think peer2peer can be on some exchanges, this helps citizens of countries like man that has a ban on crypto-currency to go-by.

Im using Binance P2p for buying and selling my crypto if its available in your location you can try this one its very simple and easy to transact without worrying from your bank account since your transaction involves bank to bank only or other payment option available on your location thats how easy for me to exchange crypto. 

You can side step your bank by transferring your FIAT to a Revolut account and then transfer
those funds to your exchange.

This is my preferred method and works flawlessly.

As RickDeckard posted dont by Bitcoin directly on Revolut because its a custodial service,
you dont actually own the Bitcoin because you cannot move it off the Revolut platform.

You can also use  a PayPal service like wesellcryptos.com

https://bitcointalk.org/index.php?topic=5316165.msg56345041#msg56345041

You have to read the law and find restrictions on crypto tradings in your nation. Do you know any restriction on cryptocurrency in your nation?

If it is not, it would come from your card (Trading history, bad record with money flow from dark markets, money laundering). I know if a card is stolen by hackers, and used to buy bitcoin with stolen fiat. If the victim files a report to police officially. Police takes actions and send freeze request to bank, your card will be frozen.

It will unfrozen only if you proved that you are victim of hacker or the stolen money will be sent back to the victim.

So what is the status of cryptocurrencies in your country?

Some bank block their customers even when the cryptocurrency is legal in their jurisdiction then the reason could be money laundering, in this case if you use any local exchange or sites like e-toro then you will be fine.

If cryptocurrencies are completely banned in your country then the only option for you is to trade via peer to peer trading platforms like LBC and Paxful which needs KYC or decentralized peer to peer trading platforms like Localcryptos where you no need to provide any information but the prices are going to be higher than market price.

You have to give your bank details to your trade partners and I don't know how secure your trading history and bank details will not be leaked. It can be leaked by exchanges, third party companies that provide KYC services or by your trade partners.

You are not correct that on P2P market or OTC market, you can get higher or lower price than on centralized exchanges. It depends on the offer you choose to open your trades.

Thank you all for your replies to my questions.  On further investigation, it appears as though the authority responsible for financial activity in my country has indeed banned the buying and selling of cryptocurrency for retail consumers.  The likes of eToro is registered in my country with the authority and their terms indicate cryptocurrency transactions with customers from my country will not be fulfilled, so I can't for example use eToro.  It's slightly confusing (hence why LOTS of research is required beforehand) in that many companies still seem to advertise the buying and selling of cryptocurrency for consumers in my country, stating the transaction can be completed via credit or debit card.  For many (most) consumers, this is simply no longer possible.  In short, the buying advice on many websites seems to be outdated for my country.  No doubt I could try it and see if I'm successful (lucky), however I don't want to risk my bank account in this way.

So it looks as though my options will be limited to first transferring my funds to a third party as suggested in your replies e.g. Bank > Revolut > Exchange or to consider P2P.  I know I'm stating the obvious here, however I want to identify the most secure and straightforward way to buy cryptocurrency without unnecessarily alerting my bank.

It's interesting because some experts in the financial sector have suggested my country's outright ban on crypto is unwise, because it moves investors away from legitimate platforms such as eToro onto platforms that may offer less security, because investors still want to invest in crypto and will look for ways to circumvent the national ban.

People from banned countries have no other choice so they are still trading on platforms like LBC with no issues, all you need to do is to find your trading partner who is having good reputation and less negative feedback in the recent history.If you care about your bank details then you can't trade at all.

If the status is ban then price is going to be lot higher when you are buying with fiat, and you can check this with any p2p platforms.

I'm guessing you are from Nigeria? Anyways you should go back to binance exchange, it's what people from Nigeria are using presently, yea binance exchange have p2p escrowed set up for people like yourself, you get transfer from another nigerian like yourself and you send coins to them, binance exchange will be the middle man

Guys, I think I might be okay to buy crypto even via my bank but could do with your advice.  It appears as though my country hasn't banned crypto outright.  Read this especially the bit I've put in bold:

... has banned the sale of cryptocurrency derivatives products to retail investors ... the regulator declared that the sale, marketing, and distribution of any derivatives including contracts for difference, options, futures, and exchange-traded notes (ETNs) by any local or foreign company is banned.  The Authority said derivatives based on digital assets like bitcoin (BTC) or ethereum (ETH) are ill-suited for retail consumers due to the harm they pose ... the ban does not affect the trading of virtual currencies such as bitcoin, which are not regulated by the Authority ...

And this:

... you can still buy Bitcoin and other cryptocurrencies.  The Authority isn’t stopping people buying bitcoin or other cryptocurrencies directly, but it’s banning the sale of products which track cryptocurrency prices.  These include unregulated transferable cryptoassets which are tokens but not “specified investments” or e-money ...

Both extracts are from reputable websites not just someone's random blog.  In my ignorance I had thought 'derivatives' covered the basic buying of bitcoin, ethereum etc, however if I'm reading the above correctly, I can legally still buy within my country, would you agree based on the above?

Note my plan would basically be to buy crypto over maybe 24-36 months using dollar cost average approach then sit on it for x years.  I'm not interested in regularly trading crypto or using it for other purposes e.g. buying stuff.  I think however I still need to be cautious around my bank as I've read some people have run into difficulties, even though it's only credit card transactions the bank has banned.  I'm also reading some horror stories when people try to get a property mortgage or remortgage.  Some banks are rejecting applications when they discover the applicant holds crypto :(

Also, sorry if a stupid question, if I simply intend to buy crypto and sit on it, can I complete buying transactions with the likes of Kraken?

Sources

https://news.bitcoin.com/uk-bans-sale-of-crypto-derivatives-to-retail-investors-says-move-to-save-69-million-in-losses/
https://www.fca.org.uk/news/press-releases/fca-bans-sale-crypto-derivatives-retail-consumers
https://www.fca.org.uk/news/press-releases/fca-proposes-ban-sale-crypto-derivatives-retail-consumers

Rules

If you copy and paste, don't forget source links. Please do this to obey the rule #33.

You can use binance p2p for buying and selling and conversion into your local bank currency and it won't be flagged by your bank because of the cryptocurrency ban.

The reason why you are not banned from using this service is that they do not own Bitcoin or rather they do not sell you bitcoin, you get something that has the same value of bitcoin and when you want to withdraw, you are withdrawing your profits in USD and not the bitcoin.


in short, Not your keys, not your coins. Avoid it if you want to keep BTC for long time.


PayPal does the same, you cannot withdraw Bitcoin

If you give us more information such as your country, or the payment methods that you can obtain, we can give you the best method for you.

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Some people buy gift cards for cash and sell them for Bitcoin which are anonymous and good for small amounts.

Peer 2 peer offers one of the best chance  for you in buying crypyos within crypto banned territories as it is a trading system that oftens sidelines the bank as to what is the purpose of your business transactions. Mind you, when cash is not involved and you've still got to use quickteller services in transferring fiat as payment for traded coins, there is always a section for comments on trade. In case of such comment section, its always best to live it void or use any random comment that defines trade in a way but have got nothing to do with crypto to avoid further complications as to reasons for fund transfer.

I'm in the UK, where I understand it's not illegal to buy and own crypto, however it's illegal to trade?  That doesn't bother me as my intention would be to buy and sit on my investment, trading in that sense doesn't interest me.  What I'd ideally like to do is:

1.  Create account with a reputable broker that allows you to retain your own keys (I'd want to go the offline wallet route.)
2.  Transfer money from my bank account to the broker, perhaps on a monthly basis to cover my dollar cost averaging buying strategy.
3.  When I then want to buy, I'd already have funds with the broker, so I'd be free to buy and sell within that environment.

I do still have some concerns, not sure to what extent these are founded, because you see stories online of people (within the UK and other countries where it's legal to buy crypto) having their bank accounts frozen when it's discovered they're transferring money to a crypto broker.  The account holder often has to go through a protracted process to get their account unlocked.  So I'm not sure if my above process could still present challenges for me?

I want to invest in crypto, however I don't want to rock the boat with my traditional bank account as it runs all my financial activities!

And I seem to be struggling to find many brokers that allow you to hold your own keys?  I don't want to use a broker that holds the keys, surely that increases your risk of losing your investment?

So cryptos are legal in your country so it is not stopping you from buying or using it as currency, so your bank doesn't know the source of income so they may put on hold until you submit the source of money and you are paying taxes on your capital gains if there is any. No brokerage is going to give you the keys to control your fiat account because fiat itself is centralized and brokerage is responsible for every kind of purchase is happening.

Thanks for the reply.  Not sure if I'm misreadng/misunderstanding you.  Say for example I pay £200 into a broker account.  Forgetting fees, let's say I buy £100 of crypto.  So I then have £100 remaining in my broker fiat account and £100 in my crypto broker wallet.  Do the brokers not allow you to hold the public and private keys for the crypto investments you've made via them?  Apologies if I'm not understanding, however my preference is to hold my keys in my own offline wallet and for the broker not to have the private key.  Is this not possible?

When you say the world deposit means then there will be no control over the fees. The platform will allows you to withdraw at any time you want but they are going to release not by yourself. You can use peer to peer platforms which are completely decentralized but you cannot deposit any amount, you directly pay the seller's bank account and will receive cryptos once the payment was confirmed by the seller and escrow.

Bisq  :)

It is a pretty perfect solution for "small" transactions, deals are secured by an inbuilt escrow. Everyone is anonymous and there is a reputation system too.

You can use fiat bank transfers with strangers or even trade alt coins for bitcoin with people.

https://bisq.wiki/Main_Page

Downside of Bisq is security deposit which maybe higher but the minimum amount could be 15% of the total trade volume so its actually perfect for bigger trades not for someone who trades in few hundreds or less than hundred dollars too often.

So weird if the banks really ban their users because of using it or crypto transactions.
But, actually, how can it be? is crypto illegal in your country? if yes, it makes sense.
Bank probably only follows the rules and will always act like that.

However, if you want to make any transaction, maybe you can use a P2P transaction, or I also wonder how you can transfer the money to buy it.

And about PayPal, yeah you can buy crypto at PayPal but you cannot withdraw it, only for trading there.
Except that you use PayPal or gateway and transfer it into a certain exchange.

This way maybe longer because you need double ways to get into certain exchanges. But I think it will okay as long as the ways are normal and also easy to do without any complication and also challenges.

It depends on rules and regulations on cryptocurrency in each nation. In some nation, cryptocurrency exchanges to fiats are prohibited by laws. In some other nations, such exchanges are not prohibited but are not protected by laws and governments. So go ahead with your cryptocurrency exchanges but if you unfortunately get scammed, you won't be protected at any levels. Worse when you are not scammed by anyone else but if you have trades in bank transfers with a scammer who stole money from someone else, victims filed support to police. Hence, banks are required to freeze banks have relations to that scammer. Your bank account will be frozen or at least some amount will be frozen. It is terrible.

P2P trades are risky as I discussed above. Choose trusted trade partners to avoid risk of bank account freeze.

People will still use PayPal if they already have money in PayPal. They will easily to use PayPal to convert their fiat to btc even it is only a virtual credited figure, not real amount of btc on PayPal.

If you aren't particularly fond of the bank in the first place, then I would recommend just changing banks. Not just because they are blocking cryptocurrencies, but by doing so they are demonstrating that you aren't truly in control of your money, and you are governed by their policies. I've done this in the past, I haven't agreed with the policies set out by banks, and therefore changed bank accounts. I haven't really looked back since, and the bank I'm with now hasn't blocked any transactions concerning Bitcoin.

Obviously, what others have recommended about P2P transactions is good advice, but doesn't come without its risks. Personally, I'm very strict when it comes to relying on third parties, and when they demonstrate something which goes against my beliefs, whether its in their policies or not I'll look for better alternatives. Depending on the country you are in, I've noticed that the "older" banks are more hostile towards Bitcoin, while the newer challenger banks are more accepting. There are a few older banks which are accepting of it, but out of the big ones in the UK I've either had or heard issues from friends from at least 3 of them.

Bank of America is blocking all crypto transactions by default, I can call them and re-try the transaction after their ok, but in a few weeks - same story.  They are just not found of crypto.

I'm in the UK.  Buying crypto isn't banned, however trading is.  I think what's happening is banks are seeing transactions on someone's account e.g. transfer to Coinbase, and whether it's an automatic (e.g. picked up by software) or human interaction, the account might then be blocked as the bank assumes the account holder is trading crypto.  I've also heard of people hitting difficulties when trying to arrange a mortgage/re-mortgage if transactions such as Coinbase are showing up on statements.  There are ways around the latter e.g. just don't move money for a few months prior to arranging the mortgage (banks only ask for 1-3 months previous statements) however I reckon the only way to avoid my raising suspicion with my bank is to transfer money to a third party and then buy my crypto from that source. 

You are the owner of the money and I don't know why you have to bend to the bank policies since you are from the UK. Why do you change bank just as Welsh said cause I read that Barclay, Natwest, SCB, RBS, TSB supported crypto related payment.
You can also also open Revolut account if you don't want leave the bank though.

The ban was brought in via our FCA:

https://www.fca.org.uk/news/press-releases/fca-bans-sale-crypto-derivatives-retail-consumers

To be fair to my bank, I've not yet tried to move money to a broker or any other route that might suggest 'this customer is buying crypto' so I can't comment yet as to whether they would block my account.  However I'd rather find legitimate ways to avoid even highlighting this to them.

Its just your bank policy maybe so they started to block even if its legitimate but you are saying they are uet to ban but still want to continue with then which is so weird.

So you come from the UK.
Maybe you can find local sellers from your country that can be like a bridge to help you to buy or sell bitcoin. We called it the p2p market.
You can try to use Jaxx and try to use their feature about buying bitcoin, I see Simplex powers that feature, and in that feature, I see the option to use a credit card or Bank Transfer you can see you can send the money.
For more information, maybe you can visit Simplex.com.
But I do not use that service to buy or sell bitcoin because I have local sellers who help me do that.

Don't try it since FCA have placed the ban but you can still trade online and conduct crypto related transaction using peer to peer exchange, open Revolut account.or ask one of your bank official about it.

What he saying is that he haven't try to transfer any fund to cryptocurrency related site to be sure if they ban crypto related transaction but since FCA banned crypto investment or trading by retailer consumers which was effective on January this year, his bank will definitely ban every crypto related transactions.