Dubai [UAE], March 06:As millions of consumers worldwide attempt to purchase digital assets through traditional banking channels, a growing number report having their transfers blocked without explanation. Open Wallet, a self-custodial crypto wallet with integrated on-ramp and off-ramp support across 37 countries, today outlined the seven most common reasons banks block crypto-related transfers and the steps consumers can take to navigate them.
“This happens to thousands of people every day,” said Mitul Manish, co-founder of Open Wallet. “Banks rarely explain why, and we want to change that.”
Anti-Money Laundering Compliance Drives Majority of Blocks
The most prevalent cause is regulatory compliance. Under Anti-Money Laundering (AML) frameworks, banks are legally required to flag transfers to digital payment token service providers.
For example, in Singapore, the Monetary Authority of Singapore (MAS) guidelines mandate enhanced due diligence for such transactions, causing many banks to reject transfers preemptively regardless of individual customer intent.
Exchange Whitelisting Policies Remain Opaque
Many financial institutions maintain internal approved and restricted lists of crypto platforms, and transfers to exchanges that are not licensed within a given jurisdiction or have not been vetted by a bank’s compliance team are frequently auto-rejected.
Fraud Protection Algorithms Flag First-Time Purchases
Banks employ automated fraud detection systems rather than human reviewers, meaning a first-time transfer to a new overseas payee, particularly for a large sum, is statistically indistinguishable from a compromised account attempting to move funds. Many customers find that a single call to their bank confirming the transfer is intentional resolves the block and allows subsequent transfers to proceed without issue.
Undisclosed Internal Policies Affect Major Institutions
Several global banks have implemented quiet, undisclosed policies restricting crypto-related transactions that are not published in terms and conditions and typically only surface at the point of an attempted transfer.
Correspondent Banking Networks Introduce Additional Risk
International transfers pass through multiple intermediary banks, each capable of independently blocking a transaction. In documented cases, US-based correspondent banks have rejected transfers containing payment references that include terms such as “Bitcoin” or the name of a known exchange, even when the originating bank approved the transfer.
Informal Regulatory Pressure Creates De Facto Restrictions
In some jurisdictions, no formal prohibition on crypto transactions exists, yet regulatory bodies have used informal guidance and industry engagement to discourage banks from facilitating digital asset purchases. The United States, India, and Nigeria have each seen variations of this dynamic, resulting in practical access barriers for consumers despite the absence of explicit legal prohibition.
Recommended Steps for Users
Open Wallet advises users experiencing blocked transfers to take the following steps:
– Contact their bank directly to confirm transfer intent, as most first-time blocks can be resolved with a single call
– Transact with licensed exchanges where possible, as these face fewer institutional restrictions
– Avoid including exchange names or crypto-related terms in payment reference fields
– Maintain transfer volumes consistent with established personal banking patterns
About Open Wallet’s Approach
Open Wallet addresses the underlying structural issue by providing users with a dedicated IBAN or local account number, issued by a regulated entity, in their own name. From a bank’s perspective, the transaction appears as a standard bank transfer, while the digital asset component of the transaction occurs entirely within the wallet infrastructure.
“The problem isn’t any single blocked transfer,” said Mitul Manish, co-founder of Open Wallet. “It’s that the architecture forces consumers to bridge two systems that were never designed to work together, and we built Open Wallet to remove that friction permanently.”
About Open Wallet
Open Wallet is a self-custodial crypto wallet with built-in on-ramp and off-ramp support across 12+ countries. The platform enables users to move funds in and out of digital assets without triggering traditional banking compliance flags.
Disclaimer: This is a sponsored article. ABP Network Pvt. Ltd. and/or ABP Live do not endorse/subscribe to its contents and/or views expressed herein. Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.
