UK Banks Face 10,000 Complaints Over Blocked Crypto Transfers
UK banks received close to 10,000 complaints in a single 90-day period from customers whose crypto-related transfers were blocked or delayed, according to a report cited by Decrypt published on 21 October 2026. The figure is not a minor compliance footnote. It is a measurable signal that the friction between bank-level AML gatekeeping and legitimate digital asset activity has reached a scale that accounting firms, auditors, and CFOs can no longer treat as someone else's problem.
What the Complaint Volume Actually Tells Us
Ten thousand complaints in 90 days works out to roughly 111 per day, every day, across the UK banking sector. The underlying pattern is well established: banks apply enhanced due diligence to payments that touch crypto exchanges or wallets, and when the customer cannot satisfy the bank's request for information quickly enough, the transfer is held or rejected outright.
Why banks block crypto payments
The legal basis sits in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which require firms to apply enhanced due diligence to higher-risk transactions. Banks have discretion over what triggers that threshold, and many have set internal rules that flag any outbound payment to a registered crypto asset firm automatically. The result is that even a transfer to a Financial Conduct Authority-registered exchange can be held pending additional checks.
Banks are also working under pressure from the FCA's own supervisory expectations. Firms that have failed to apply adequate AML controls have faced significant regulatory action in recent years, so the incentive to over-flag rather than under-flag is strong. The cost of that caution, however, is increasingly borne by retail and business customers whose legitimate transactions are caught in the same net as genuinely suspicious activity.
The scale relative to earlier periods
A 90-day complaints window of this size suggests the problem has not diminished since the FCA began its crypto asset registration regime. If anything, the expansion of the registered crypto firm population, combined with growing retail and institutional participation in digital assets, has increased the volume of bank payments that trigger enhanced scrutiny. The complaints data, taken at face value, indicates that the rate of blocking has outpaced any improvement in how banks communicate their decisions to customers.
Accounting and Audit Implications for Firms
For an accounting firm or an in-house finance team managing a client's digital asset operations, a blocked bank transfer is not just an inconvenience. It creates a cascade of bookkeeping problems that can take weeks to untangle, and in some cases, it leaves permanent gaps in the audit trail.
Reconciliation breaks and timing differences
When a transfer is initiated on one date and then held for several days before either completing or being returned, the accounting entries depend on which treatment the bank ultimately applies. If the payment is returned, the firm must reverse the original journal entry, potentially in a different accounting period. If it completes late, the settlement date recorded on the blockchain or exchange ledger will differ from the bank value date, creating a reconciliation difference that needs a narrative explanation.
For firms using crypto accounting software to automate the matching of on-chain activity to bank statements, these timing gaps break the automated reconciliation logic. A manual override is required, and that override needs to be documented so that the auditor understands why the matching rule was suspended. Without that documentation, the auditor's testing of the reconciliation will flag the item as an unexplained difference, which triggers additional work and, in some cases, a modified audit opinion on the completeness of digital asset disclosures.
Client onboarding and custody documentation
Accounting firms that act as trusted advisers to crypto-active clients are increasingly being asked to help those clients prepare the documentation that banks request before releasing a blocked payment. That typically means a letter of engagement or business purpose statement, evidence of the exchange's FCA registration, and in some cases, a description of the client's source of funds for the specific transaction.
Firms that have not built a standard pack for this purpose are finding that each bank request becomes a bespoke exercise. Building a reusable template, reviewed by a compliance professional, reduces the turnaround time and makes the client's response more credible. It also creates a contemporaneous record that can be produced in any later regulatory enquiry about the transaction.
Impact on financial statement presentation
A blocked transfer that is not resolved by the balance sheet date can create a question about how the asset should be classified. If the bank holds funds that the client has instructed to be sent to an exchange, those funds are no longer freely available cash, but they have not yet been converted into a digital asset either. The correct presentation depends on whether the hold is likely to be temporary or permanent, and that judgement requires input from both the legal adviser and the accountant. Firms that have a documented process for handling these situations will produce more consistent financial statements than those that treat each case ad hoc.
What This Means for CFOs at Crypto-Active Businesses
CFOs whose businesses hold or transact in digital assets need to treat banking relationships as a compliance dependency, not just a treasury function. The complaint data suggests that even well-documented, legitimate transactions are being blocked, which means the risk is not confined to firms with weak AML controls. It affects any business that moves funds between a bank account and a crypto venue.
Banking relationship management as a risk control
CFOs should know, specifically, which of their banking counterparties have stated policies on crypto-related payments and what the escalation path is when a payment is held. That information is not always easy to obtain, but a direct conversation with the bank's corporate relationship manager, documented in writing, creates a baseline that can be referenced if a dispute arises later.
Some businesses are maintaining accounts at more than one bank precisely to manage this risk. If one bank blocks a time-sensitive settlement, having an alternative account at a bank with a more transparent crypto payment policy allows the business to complete the transaction without a delay that could have commercial or contractual consequences.
Connecting bank-level friction to the broader FCA framework
The FCA has been clear that it expects both banks and crypto asset firms to apply AML controls proportionately. The Travel Rule, which requires originator and beneficiary information to accompany crypto asset transfers above certain thresholds, is now in force in the UK. Banks that are not yet equipped to receive and process Travel Rule data from crypto exchanges may be defaulting to outright blocking rather than handling the information correctly, which would mean the complaint volume partly reflects a systems and process gap on the bank side rather than a failing by the customer.
For compliance teams, this is relevant because it suggests the problem is not purely about customer behaviour. Engaging with the bank about its Travel Rule implementation, and ensuring that the firm's own crypto exchange or custody provider is sending compliant Transfer of Funds data, may reduce the rate of holds on payments where the information is technically complete. Our earlier analysis of how AI is reshaping FCA crypto supervision sets out the broader direction of travel for automated compliance checks that sit underneath these decisions.
Practical Steps for Accounting Firms and Compliance Teams
The complaint data is a useful prompt to review internal processes before a client or the firm itself experiences a blocked transfer. Several actions are worth prioritising.
Build a standard bank challenge response pack
Prepare a template that can be adapted for each client and each bank. It should cover the client's business purpose for the transaction, the regulatory status of the receiving exchange or wallet, the source of funds for the specific transfer, and any prior correspondence with the bank about crypto payments. Having this ready before a transfer is initiated, rather than scrambling to assemble it after a block, cuts the resolution time significantly.
Review digital asset accounting software configurations
Any firm using digital asset accounting software to reconcile crypto activity should check how the software handles unmatched items when a bank transfer is delayed or returned. The configuration should flag these items for manual review rather than carrying them forward as unreconciled differences. If the software does not have a native workflow for this, a manual procedure note should be added to the month-end close checklist.
Document the tax position on delayed transactions
For clients who are disposing of crypto assets, the date of disposal matters for capital gains tax purposes. If a bank hold delays the transfer of fiat proceeds from a crypto sale, the question arises whether the disposal date is the date the crypto was sold on the exchange or the date the proceeds arrived in the bank account. HMRC's guidance on the disposal date for crypto assets should be reviewed in the context of any blocked transfer, and the position taken should be documented. The HMRC penalty framework for digital platform operators is a reminder that documentation gaps in the crypto space attract regulatory attention.
Engage with the FCA's consumer duty framework
For firms that advise retail clients, the FCA's Consumer Duty places an obligation on firms to consider outcomes for clients, including situations where a client suffers a financial loss because a bank has blocked a legitimate crypto transfer. If the client has relied on advice from the firm to execute the transaction, and the firm was not aware of the bank's likely response, that could give rise to a complaint against the firm. Updating client suitability assessments to include a question about the client's banking arrangements for crypto payments is a low-cost control that reduces this exposure.
Frequently Asked Questions
Can a UK bank legally block a payment to a crypto exchange?
Yes. Banks operating under the Money Laundering Regulations have discretion to request additional information before processing any payment they consider higher risk. They are not obliged to complete a transfer simply because the receiving firm is FCA-registered. However, a bank that refuses a payment without reasonable grounds may face a complaint to the Financial Ombudsman Service.
What should a client do immediately when a crypto transfer is blocked?
The first step is to request the bank's reason for the hold in writing. The bank must provide this under the Payment Services Regulations in most circumstances. Once the reason is known, the client can prepare a targeted response rather than submitting a generic business purpose letter. If the bank does not respond or refuses to release the funds, a formal complaint to the bank's internal complaints team, followed if necessary by a referral to the Financial Ombudsman Service, is the appropriate route.
Does a blocked transfer affect the crypto disposal date for tax purposes?
HMRC's guidance treats the date of disposal as the date the transaction is entered into, which for an exchange trade is typically the trade execution date rather than the date the fiat proceeds settle in the bank. However, if the bank hold prevents the trade from executing at all, no disposal has occurred yet. Firms should review the specific facts of each case and document the position taken, particularly where the block straddles a tax year end.
How does the Travel Rule interact with bank payment blocks?
The UK's Travel Rule requires crypto asset firms to pass originator and beneficiary information with transfers above certain thresholds. If a bank is blocking a payment because it has not received Travel Rule data from the sending crypto firm, the solution is to ensure the crypto firm is sending compliant data and that the bank's systems are configured to receive it. Compliance teams should confirm both sides of this chain are operational before assuming the block is purely discretionary.
Should accounting firms update their engagement letters to cover bank blocking risk?
It is good practice to include a brief note in engagement letters for crypto-active clients that sets out the firm's role, and its limits, if a bank blocks a transfer. Specifically, the letter should clarify whether the firm will assist in preparing bank challenge documentation, whether that assistance is in scope of the existing fee arrangement, and what the client's own responsibilities are for maintaining banking relationships. This avoids any ambiguity if a blocked transfer leads to a dispute about the scope of the firm's obligations.
Source: Decrypt