Insights for consumers
Platform providers may temporarily restrict transactions to meet legal obligations, including the opening or monitoring of accounts under Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) laws.
A platform provider needs to comply with the law and their own policies about how accounts are opened and transactions are monitored. However, they may not need to tell you all the reasons why they temporarily refuse a transaction.
Harris finds out his Bitcoin account is frozen after his withdrawal failed
Harris requested to withdraw Bitcoin from his account, transferring it to his wallet, but his provider refused it.
Harris is unhappy that the provider refuses his withdrawal without explanation
Harris said that instead of engaging with him to obtain additional information, his provider refused the withdrawal without giving him a reason. The provider said that they had frozen all withdrawals from his account.
Harris, unhappy with this decision, complained to FSCL.
As FSCL investigates Harris’ complaint, his account freeze is lifted
We asked the provider for more information. During this time, they found sufficient information to approve the Bitcoin withdrawal and lifted the freeze on Harris’ account.
Harris is offended by an implication of criminal or fraudulent activity
Harris said he was still unhappy that this had happened. He was also concerned about whether there was an implication that he could be involved in fraudulent or criminal activity. He closed his account and wanted to be sure that the provider deleted all his account information.
How did FSCL investigate Harris’ complaint?
We asked the provider to confirm that they only retained personal information about Harris, as required by law and for regulatory compliance, and that all other personal information about him was deleted from their systems.
We reviewed the provider’s terms and conditions and found that they had acted according to the terms of use to ‘restrict and suspend accounts’. These terms were consistent with the provider’s legal and regulatory obligations to adequately monitor transactions and ensure accounts are operated in accordance with AML/CFT laws.
Providers can determine their own risk appetite and policies about how to best meet their legal and regulatory obligations. In Harris’ case, the provider was acting in accordance with the terms of use.
We explained to Harris that providers were required to have these policies and to monitor accounts for any activity that was unusual for that account. This did not necessarily mean that his provider thought he was engaging in any fraudulent or criminal activity. We assured him that they were acting in accordance with their terms of use and that they only held information about him as required by law and regulation.
