Why your crypto withdrawals and bank transfers get blocked (and how to avoid it)
- Franco Fernandez
- 5 days ago
- 17 min read
Have your cryptocurrency withdrawal or a transfer to your bank been frozen?
You’re not the only one. More and more users in Spain are running into blocks when moving their money from exchanges such as Binance, Bit2Me, Kraken or Crypto.com to their bank accounts (BBVA, ING, CaixaBank, Revolut, etc.).We’re going to explain the typical causes of these blocks, how banks react, real examples of what’s happening, what documentation they usually ask for to unblock, practical tips to avoid them, and warning signs so it doesn’t catch you off guard.
Blocks at exchanges: common reasons
Cryptocurrency exchanges have automatic systems and compliance teams to detect suspicious activity. When something doesn’t add up, they can halt your crypto or fiat withdrawals as a precaution.
By far, the most common are the following:
Incomplete KYC verification or additional requirements: If you haven’t fully completed identity verification (KYC), or if you suddenly move large amounts, the exchange can request extra “Source of Funds” (origin of funds) or “Source of Wealth” (origin of wealth) proofs. Until you submit those documents, withdrawals can be blocked. For example, it’s common for them to ask you to prove where the money with which you bought the crypto came from (payroll, savings, sale of a car, etc.) before letting you withdraw it to your bank account.
Unusual activity or suspicious behavior: Security algorithms look for abrupt changes in your usage pattern. If you normally do small operations and suddenly try to withdraw a large sum, or if you carry out a lot of transactions in a short time, it’s possible they trigger an alert.
Things like resetting 2FA or the password can also trigger a preventive 24-hour block on withdrawals, in case it wasn’t you who made the change (a common security measure at Binance and others).
High-risk addresses or transactions (suspicious traceability): All the major platforms analyze the origin and destination of cryptocurrencies with blockchain analytics tools. If your crypto has passed through addresses associated with illicit activities (scams, hacks, black market) or through mixers to hide their origin, the platform will know and may freeze your funds while they investigate.
Even fully legitimate users can be affected if, unknowingly, they receive “stained coins” that were once involved in crimes
It is important to highlight that although the use of mixers is not illegal per se, exchanges look upon them very unfavorably; in the best case they will subject you to extra monitoring, and in the worst they can block your account if they detect mixed funds.
AML alerts and blacklists: Exchanges comply with international anti-money laundering (AML) regulations. If your movements fit laundering patterns (for example, many inflows and immediate outflows of funds from different sources) or if your first/last name matches someone on a sanctions list or a PEP (Politically Exposed Person), it’s likely they’ll freeze your activity until it’s clarified.
High-risk jurisdictions or violations of terms: Do you connect with a VPN from unusual countries? Has your account interacted with users or banks in places under sanctions? Exchanges monitor geolocation and can block withdrawals if they suspect that you are in a prohibited country or dealing with banned entities. Likewise, using multiple accounts, or third-party accounts, goes against the policies and can lead to a permanent block.
In 2024, Binance toughened its policies in Europe with the arrival of MiCA, even delisting privacy coins such as Monero to comply with regulations
Any regulatory change can translate into sudden limitations on your withdrawals due to “changes in terms and conditions” – just as happened to some users who received an email from Binance indicating that their account would be closed due to new conditions, giving them 48 hours to withdraw their funds.
Scam prevention (phishing): At the end of 2023, many Binance Spain users wanted to move their crypto to other platforms out of distrust, and Binance put obstacles in their way. The platform even blocked withdrawals alleging that the destination address could be a phishing site, although in reality the destination was another legitimate exchange.
This security pretext allowed them to delay or prevent the flight of capital. Binance stated publicly that these are measures to “safeguard investors” against possible scams and addresses marked as suspicious, but many users interpreted it as a tactic to retain funds. In any case, if your exchange believes you are sending crypto to a scam or if it detects potentially fraudulent activity in your account (for example, that you have been a victim of phishing), it will block withdrawals immediately to prevent the funds from disappearing.As you can see, the reasons range from strict legal compliance to account security and even business strategy. The result for you is the same: you cannot dispose of your crypto while the block lasts. Now let’s move to the other front: your bank in Spain.
Reaction of Spanish banks to inflows from exchanges
When you manage to withdraw money from an exchange to your bank account, banks in Spain are required by law to monitor any suspicious inflow, and transfers coming from cryptocurrency houses raise many red flags. What can banks do? Basically four things: reject the transfer, freeze the funds temporarily, ask you for information, or even close your account.
Let’s see why this happens. The key reference is Law 10/2010 on the prevention of money laundering. This regulation obliges banks to detect and prevent possible cases of laundering or terrorist financing. Income coming from the crypto world is usually considered high risk because the bank does not clearly see the ultimate origin of the money.
Your bank will freeze funds linked to crypto if they don’t match your usual profile, if it receives transfers from an exchange without clear justification, if you cannot prove the lawful origin of the money, or if you don’t respond in time to their requests for information.
In practice, this is not a judicial seizure but it feels the same: they leave you without access to your money while they investigate.
How does that block show up? Some banks directly reject or return the transfer before it reaches your account. For example, a user reported that Kutxabank warned him that they would return any withdrawal from Kraken, refusing to operate with crypto.
Other banks first accept the inflow but leave it “on hold” in the account and block your movements. You might find out because you see the credit but can’t use it, or worse, because suddenly your online banking is partially or totally blocked.The most common thing is to receive a call or notification from the bank requesting explanations and documents. BBVA, Santander, CaixaBank, ING… any of them can contact you indicating that, “in compliance with anti-money laundering regulation,” they need you to prove the origin of those crypto funds before releasing them.
In fact, the Bank of Spain itself recognizes that entities classify these operations as high risk and can subject them to additional controls (phone calls, appearing at a branch, etc.), always informing you at least in a generic way by citing Law 10/2010.ING, for example, has gone so far as to block transfers to exchanges for “security reasons” temporarily, and several national banks have implemented internal policies to limit operations with crypto companies when they deem it necessary.And if you provide what they ask for? In theory, once the bank’s compliance is satisfied, they unfreeze the money.
The preventive block should last the minimum while they review everything. In practice it can take 48 hours or several weeks, depending on the case.If you have quickly provided all the documentation they asked for and everything is in order, the bank usually returns your account to normal in a few days. BBVA indicated in a public case (when it blocked accounts of 1,000 Chinese clients in 2019) that “as customers deliver the appropriate documentation, accounts are being unblocked at a good pace.” But beware: if there is any shadow of doubt, they will lengthen the investigation.
Especially if your funds passed through mixers, anonymous DeFi or come from multiple sources that are hard to trace, the bank will have much more difficulty verifying the origin and the freeze can be prolonged.Can they close your account over this? Yes, they can. The law allows, as a last resort, the termination of the relationship with the customer if they do not comply with due diligence measures (for example, if you never submit the requested documentation, or if they actually suspect that you are laundering money).There are users who report that certain banks have invited them to take their money elsewhere after many operations with cryptocurrencies. It’s not usual if you cooperate, but it’s a possibility.
In addition, bear in mind that an indefinite block without justification could be considered bad practice: the Bank of Spain establishes that the bank must act with proportionality and transparency, and allow you to defend yourself.
You have the right to file a complaint if you feel they have gone too far (we’ll see how below). Now that you know the “what” and the “why,” let’s look at real cases that illustrate these blocks both at exchanges and at banks.
Real cases in Spain
To bring all this down to earth, nothing better than some real cases from users in Spain and actions by platforms:
Binance user blocked due to suspicious address: An Argentine investor on social networks recounted that Binance blocked his withdrawals for sending crypto to an address marked as suspicious. He traded daily and, without knowing it, some counterparty had “stained” funds. Binance even notified him several times that he had interacted with high-risk addresses.
This anecdote shows how on-chain traceability can trip you up: it’s enough that your money touches a blacklisted address for you to get on the AML radar.
“Changes in conditions” and account deleted: Another user received an email from Binance indicating the closure of his account in 48 hours due to “changes in the terms and conditions that affect your account.” He had about 1,000 euros in crypto, he was able to withdraw them in time by a miracle.
When asking what would happen if he didn’t withdraw, support told him that after 60 days they would move his funds to an unrecoverable wallet (they would basically burn them!). This case sounds extreme, but it’s true. The real reason? They never clarified it. Possibly a regulatory issue (by country of residence, or use of some product they withdrew) or a risk flag.
It serves as an example that exchanges can unilaterally close accounts and give you an ultimatum to withdraw, sometimes with vague explanations.
ING vs. Coinbase (2018): In January 2018 many ING Spain customers discovered that they couldn’t transfer money to Coinbase to buy Bitcoin. The bank blocked those outflows. When contacting ING, they replied: “For security policy reasons, operations with bitcoins are being reviewed. In a few days it will return to normal.”
Indeed it was a temporary measure: the service was restored a week later. ING alleged “internal security protocols.” This precedent (and another similar in 2015) showed that banks could, overnight, cut transfers to exchanges. There was an uproar on Twitter and forums, but it was finally reversed. Even so, it made clear that your bank can decide to block first and ask questions later.
Forobits forum 2019 – Kutxabank warning: A user commented how Kutxabank called him because “from above” they were ordered to warn him that they did not accept operations with crypto. They told him clearly: don’t send more money to Kraken, and if you try to withdraw from the exchange to this account, we will return it.
They basically invited him not to use Kutxabank for crypto. Other participants in the forum commented that they would do the same: close the account and take their money to a more “crypto-friendly” bank as soon as a bank gives them trouble. This example shows that some small/regional banks could have even stricter policies, even proactive ones to scare off crypto users.
Protest by Chinese customers against BBVA (2019): This case reached national media. A thousand Chinese citizens in Spain demonstrated in front of BBVA because the bank had massively blocked their accounts. The reason? According to BBVA, many had not provided documentation on the origin of funds in accordance with Law 10/2010, and they were simply complying with the regulation.
Those affected alleged discrimination, saying that even when submitting papers their accounts remained blocked for months, something that didn’t happen with customers of other nationalities. Finally, after the protest, BBVA announced that it would proceed to unblock the accounts upon submission of the pending documents.
Although this case was not exclusive to crypto, it illustrates the severity with which a bank can freeze hundreds of accounts due to AML suspicions. The lesson: if you don’t submit the papers they ask for, your money can be in limbo indefinitely, to the point of having to take legal or media action.
Vozpópuli 2024 – Binance makes withdrawals in Spain difficult: A Spanish financial daily reported at the beginning of 2024 that Binance Spain was putting obstacles to taking crypto out to other exchanges, in the face of the stampede of users due to the FTX case and its own fines.According to Vozpópuli, Binance applied limitations to both large and small amounts, and sent contradictory messages to those trying to move their assets.
The article states that Binance used the excuse of potential phishing at legitimate destinations to slow down withdrawals, especially amounts of €2,000–€3,000 or higher.
Although Binance officially denied it saying that it “does not prevent users from withdrawing their funds” and that it maintains 1:1 reserves, many Spanish investors felt that it was much harder for them to get their money out than before.
This case reflects how, in uncertain environments, an exchange can temporarily tighten its withdrawal filters, affecting even users who are doing everything correctly.
In short, the real cases confirm the previous points: blocks happen and they’re not rare. Both exchanges and banks act “just in case” when something smells off to them or when regulation tightens.
The key for the user is to know how to unblock the situation as soon as possible and, better yet, how to anticipate it to avoid getting blocked. Let’s see what they can ask you for and how to prepare.
What documentation can they ask you for? (KYC, source of funds, etc.)
When a block occurs, whether at the exchange or at your bank, the only way out is by cooperating. You will have to prove who you are and where the money comes from. These are the typical proofs and documents that are usually required to unblock funds:
Personal identification (basic KYC): A copy of your DNI, NIE or passport, verification selfies, proof of address (bill or registration). This is standard if you hadn’t provided it when registering on the platform. Without completed KYC verification, no regulated entity will let you move large sums.
Account and wallet statements: They may ask you for transaction history. For an exchange, CSVs or screenshots of your trading history are something usual. At the bank, perhaps statements from other accounts where the initial money came from. They want to see the traceability: how the fiat money got to crypto and from crypto back to fiat. Having reports downloaded from the exchanges (e.g., crypto tax report through Cointracking or Koinly) helps a lot.
Proof of crypto operations: This includes blockchain TXIDs, screenshots of your wallet showing such transfer, etc. For example, if you say that you withdrew 0.5 BTC from Binance to your Ledger, you could submit the on-chain transaction screenshot with its ID, showing date, amount and address. Some banks have specialists who review this technical information, others don’t understand anything; even so, providing it shows good faith and can be useful.
Contract(s) or commercial receipts: If the cryptocurrencies were profit from the sale of a good or service (for example, you mined Ethereum, or sold an NFT, or you were paid for freelance work in crypto), it’s advisable to submit contracts, invoices, agreements or receipts that support that operation. Any legal document that connects your crypto with a legitimate activity (a sales contract, an invoice for services, etc.) is gold to demonstrate lawful origin.
Origin of the initial fiat money: Many people forget this. It’s not enough to say “I sold my Bitcoin and there’s the money.” They will surely ask you: and to buy those Bitcoin initially, where did you get the cash? Showing the initial origin of the capital invested is crucial.
It can be your saved salary (submit payslips, bank statements showing the accumulated savings), the sale of a car or property (deed of sale, registry certificate, contract), an inheritance (will, inheritance settlement), etc.
If the seed of your crypto investment was fiat, you will have to trace the complete path of the money from its origin to the crypto and back to your account.
Tax returns: In certain cases, for greater peace of mind, you could submit your income tax return or wealth returns where those crypto or those funds appear. It’s not common for them to ask for it at the outset, but showing that you have declared your crypto gains to the tax authority can dispel suspicions. In addition, if the amount is very large, the bank may fear tax implications and this would ease it.
Screenshots of accounts at exchanges: Similar to statements, sometimes they ask you for screenshots of your profile at the exchange showing your username, KYC level, balance, etc., to prove that the account is yours and not a third party’s.
Also screenshots of conversations with support if any, everything you have that shows transparency.
A frequent question is: “How long does the unblocking take once I submit the papers?” There is no fixed rule. It can be from a couple of days to several weeks, it’s a big “it depends.”
And it depends on complexity (it’s not the same a single deposit from your payroll account as ten movements crossing exchanges and DeFi), on the workload of the compliance department, and even on the attitude of the bank.
If you see that time passes and nothing happens, remember that you can escalate the claim: first to your bank’s customer service (in writing), and if within 15 working days they don’t respond, to the Bank of Spain through a formal claim. No bank wants trouble with the regulator, so this usually speeds things up.
Practical tips to avoid (and manage) blocks
The best medicine is preventive. Here are some practical tips to minimize block risks and be prepared in case it happens:
Operate transparently and keep all receipts: Every time you make a relevant transaction, document everything. Download receipts, take screenshots, write down the TXIDs of large sends, save confirmation emails. Set up a little folder with the history of your crypto buys and sells. All that documentation will be your lifeline if you need to justify source of funds. From the moment of the initial investment to the final withdrawal, have a documentary trail.
Separate your bank accounts: A recommended tip is not to use your main account (your payroll, mortgage, daily expenses) for crypto movements. Open a second account at another bank just to receive or send money from exchanges. That way, if they block it, your personal finances aren’t strangled and you can keep paying your things with the other account. Also, this way you avoid your “normal” history getting mixed up with an irregular flow of crypto inflows and outflows, which makes banks’ alarms go off.
Choose “crypto-friendly” exchanges and banks: Not all platforms are the same. Use regulated exchanges with a good reputation that issue official receipts.
For example, Bit2Me (Spanish) gives you a written receipt for operations that you can easily submit to the bank. As for banks, some traditional ones are more reluctant (we saw the Kutxabank case), while others such as Revolut or N26 tend to be more flexible with inflows from exchanges (even so, don’t get overconfident). Research in forums which banks put fewer obstacles in Spain.
As of today, many users report that BBVA, Santander or Bankinter handle crypto inflows without so much drama (ironically, given the BBVA case with the Chinese community, but they have learned). ING had its ups and downs; CaixaBank generally follows the protocol but doesn’t close accounts lightly. In contrast, small local banks sometimes prefer not to deal with crypto at all. Get informed and choose wisely where to take your crypto euros.
Don’t make abruptly anomalous movements: If you’re going to withdraw a very large amount at once, perhaps notify the bank beforehand or withdraw it in tranches. For example, if you liquidated €50,000 in crypto, better to split it into two or three transfers separated by days than one single 50k bomb that scares compliance. Likewise, avoid repeatedly going in and out with the same amount (e.g., putting in €5,000, buying crypto, selling and taking out €5,000, several times a month) because it looks like structuring. Know yourself as a customer: anything that you, with common sense, would think “if I were an AML officer this would look weird,” probably is. Act accordingly.
Respond quickly and well to requests: If even so, they block you, don’t panic. Act. Immediately request from the bank or exchange a formal, written explanation of the reason for the block (you have the right to it).
Then, meticulously compile the documents as we explained above and send them as soon as possible. Delaying the response only prolongs your agony. A clear, honest, well-documented response usually resolves most cases in a few days. And if not, move to plan B: complain via the official route. At the bank, open a complaint with Customer Service; if they don’t answer within a month or you’re not convinced, escalate to the Bank of Spain.
At the exchange, insist with customer support by escalating levels; if they dig in their heels without reason, expose it on social networks or public forums (sometimes public pressure moves mountains, no exchange wants bad press). That said, always keep politeness and cooperation in your communications. Getting aggressive or beating around the bush only makes things worse.
Get advice if you handle large amounts: If you’re moving significant sums or have frequent crypto operations, it’s worth consulting a lawyer specializing in money-laundering prevention or a tax/financial adviser familiar with crypto. At Zenblock we can guide you on how to do things right, how to declare your gains correctly (so that the Tax Agency is happy, and therefore the bank too) and what precautions to take. It’s a cost that can save you bigger headaches.
Organization, prudence and transparency. With that, you dramatically reduce the chance of blocks. And if they still come, you’ll know how to manage them without losing your cool or your funds.
Warning signs: how to sense a possible block
Sometimes we can’t avoid a block, but we can smell it coming. Pay attention to these warning signs that usually precede or indicate that you are in the crosshairs:
Unusual messages or notifications from the exchange: If Binance, Kraken or whoever sends you a notice saying something like “We have detected irregular activity in your account,” “Your account is under security review” or suddenly asks you to update your KYC despite already being verified, be on guard.
Likewise, in Binance, a pop-up warning that the withdrawal address may be risky or phishing is a clear sign that they could block that transaction.
Don’t ignore those alerts; they sometimes include a deadline for you to do something (for example, re-verify within 14 days). If you don’t do it, they will freeze you until you comply.
Communication from the bank citing Law 10/2010 or “anti-money-laundering regulation”: This is the classic. If you receive an email/letter or call where phrases such as “by virtue of Law 10/2010,” “prevention of money laundering,” “justify the origin of an operation” appear, it means you are already on the radar. For example, the Bank of Spain indicates that the entity must at least give you a generic motivation expressly citing Law 10/2010 when they take restrictive measures due to laundering. In other words, if you hear “Law 10/2010” from your bank, red flag: your money related to crypto is frozen or about to be. Take note of any deadline they give you to respond.
Unexpected delays or rejections in transfers: If normally a SEPA withdrawal from the exchange to your bank arrives in 24h and 3–4 days have passed with no trace, or if it appears as “rejected/returned” in the exchange’s history, it’s likely the bank has blocked it. Some users find out about the block because the money never arrives and the exchange notifies them that the bank has returned it. Another sign is that your debit/credit card starts being declined when trying to buy on exchanges, when previously it worked – a sign that the bank has put a risk flag on that activity.
Changes in policies or terms of service: Stay informed about updates from both your bank and your exchange. For example, if your bank updates its conditions by adding anti-crypto clauses (some already include in contracts that they can close accounts if the customer operates with certain businesses), that’s a warning to consider.
As for exchanges, cases like Binance reducing withdrawal limits for unverified users, or banning privacy coins, are notices that they will tighten controls. Whenever you read news from your platform like “Exchange X now requires extra verification for withdrawals over Y euros” or “Bank Y no longer allows transfers to exchanges without prior authorization,” adhere to the new rule as soon as possible to avoid being blocked.
Strange questions from a bank operator: If you receive an unusual call from your bank asking “can you tell us the reason for this inflow?” or “we have seen a transfer of X euros, what is its concept?”, they may be in information-fishing mode for an internal report. The best thing is to answer with the truth in a simple way (“I sold my savings in Bitcoin through such-and-such platform, and brought the money home”). That conversation already indicates that you are a subject of analysis. After it, the formal written request may come. So start preparing the papers.
Experience of other users with your bank/exchange: Finally, sometimes the warning comes from the community. If in Spanish forums several people comment “Watch out, Bank X is blocking accounts for those receiving from Binance” or “I have read several cases of blocks at Exchange Y for using Monero,” take it seriously. Don’t think “that won’t happen to me.” Better to be cautious: perhaps diversify your routes (e.g., first try with small amounts to see if they go through, or use another alternative bank for certain risky operations).At the end of the day, the key is transparency and prevention. Document your movements, comply with verifications and don’t try to “sneak in through the back door.” If despite everything you face a block, you already know how to react: keep calm, provide what they ask for and defend your rights with knowledge.
See you next time!