The Bank of Spain has issued a warning to users regarding the actions that banks may take if bitcoin purchases are detected. Traditional banks can prohibit these transactions if they suspect dubious conditions, such as those related to identity theft or money laundering.
The Bank of Spain explains the prohibitions on crypto-related accounts
The Bank of Spain has published a blog post outlining the steps that commercial banks may take if they detect a cryptocurrency-related purchase. First and foremost, the bank states that these assets are not suitable for use as payment methods or investment vehicles, according to Spanish and European regulators.
Accounts might also be blocked as a result of questionable behavior linked to identity theft, according to the bank. It clarified:
It’s possible that the bank has concerns about identity fraud involving credential theft. There are numerous incidents of fraud in which an entity’s clients’ accounts are accessed fraudulently after the client’s passwords are obtained, and which result in a transfer to acquire Bitcoins.
This could set off alarms in the banking system, resulting in the aforementioned block to protect the customer.
Other factors, however, could result in a transaction restriction. The article goes on to say that evidence linking funds exchanged with money laundering can also result in a bitcoin purchase transaction being blocked. In this regard, the bank stated:
It’s also possible that the bank will classify this type of transaction as high-risk and impose additional restrictions, such as making a phone call or requesting you to visit the branch.
Banks are required to follow a set of rules that prohibit them from engaging in activities that could be used to launder money or finance terrorists around the world. However, banks are unable to do so without keeping a line of communication with the impacted user and providing a general rationale for the transaction’s blockage. Users may be asked to visit a bank branch in specific situations. However, the article states that banks must be flexible depending on the customer’s health and the distance from their home.
MiCA, the Markets in Crypto Assets regulatory framework, is currently being drafted in Europe to better clarify the attributions of each entity regarding cryptocurrencies and its connected actors.