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  • FIRST POST
    • mcplums
    • By mcplums 4th Nov 18, 3:58 PM
    • 18Posts
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    mcplums
    Santander blocked my account with no explanation
    • #1
    • 4th Nov 18, 3:58 PM
    Santander blocked my account with no explanation 4th Nov 18 at 3:58 PM
    It's been two weeks. They can't tell me why it's blocked, or when it'll be unblocked.

    I'm fairly sure I know why it's blocked. I use my account for bitcoin arbitrage. I had about 800k of volume go through it in a 6 month period (never cash though). Santander sent me a letter asking me why I used the account, I was 100% honest and gave them all the details. They even had a box to tick for 'virtual currency trading'.

    If it's against the rules to do what I'm doing, then why can't they just tell me so and close my account? Why all the secrecy?

    What can I do to hurry up this process? It's really !!!!ing me off. They are holding my money, which was obtained legally and ethically, hostage.

    Is it worth submitting a complaint? Is there a period of time after which I can raise this with the Financial Ombudsmen?

    I know this is off topic, and I do not want to start a conversation on the merits of bitcoin, but it is this kind of behaviour that convinces me more than anything else that bitcoin will wipe out banks, simply because it is impossible for my bitcoins to be frozen in this way. It is hard to appreciate how angry and powerless you feel when a bank freezes your money.
    Last edited by mcplums; 11-11-2018 at 10:51 AM.
Page 3
    • mcplums
    • By mcplums 10th Nov 18, 12:37 PM
    • 18 Posts
    • 0 Thanks
    mcplums
    OP I may have missed something here, if I have could you please point it out?
    If, as you assert, virtual currencies will wipe out the banks, how will you continue to operate - as you seem to depend on a bank at the moment, hence this thread?
    Originally posted by mgdavid
    Because as cryptocurrencies become more adopted over time I will depend on banks less and less.

    Similar to how in 1880 people were predicting that the internal combustion engine would wipe out the horse drawn carriage, but simultaneously need a horse drawn carriage to get from A to B.
    • mcplums
    • By mcplums 10th Nov 18, 1:05 PM
    • 18 Posts
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    mcplums
    I can see there has been an interesting discussion of whether or not what I was doing is a business activity or not- well I guess this is a good question, I guess you could argue I'm not, but I'm happy to accept I am. In which case I am agains the Ts and Cs. But as jonnygee2 mentioned this isn't particularly relevant, if the problem was just that I was using a personal account instead of a business account they likely would be more open about why I'm being shut down.

    Incidentally, I did look at opening a business account with Santander, and being up front from the start about the purpose, but they explicitly disallow any businesses that are related to crypto in any way.

    jonnygee2- I did indeed go to the FOS. They were super helpful. A couple of days after the FOS contacted Santander, they told me formally that my account was being closed down. Which was progress, and I'm very happy (assuming I get my money back- which I don't so far!).

    Now what is super weird is that the customer service dude at Santander said that my account was being closed down at the request of the FCA. And that Santander themselves did not wish to close it. This is super weird. I mean, the FCA are a regulator, not some crime agency or something similar. Is it within their remit to be closing down people's accounts? I am told that I can expect a letter from the FCA- if I do ever receive anything I will share with y'all, if you're interested! It is possible the customer service due was just confused. He originally said it was shut down by the 'FCI' until I pointed out there is no such organisation and he said 'oh yes, I mean the FCA'.

    In another development, I have just had my Halifax account shut down as well (this time however they told me it was being closed, and havn't frozen it, and said I'll continue to be able to use it for 65 days). Now I was using this for exactly the same reason as I was using Santander. I have no beef with Halifax at all, the timing however is certainly suspicious.

    I have two further bank accounts which I have had for over a decade and are NOT used for my arbitrage, they are just regular personal accounts. So far it seems they are unaffected, and most likely won't be, but I'm not going to lie, I'm a little worried these may be affected as well (this is probably me just being paranoid though). I am not sure to what extent banks talk to each other.
    • sebastianshaw
    • By sebastianshaw 10th Nov 18, 1:08 PM
    • 4 Posts
    • 1 Thanks
    sebastianshaw
    who's Santander?
    • EachPenny
    • By EachPenny 10th Nov 18, 1:13 PM
    • 7,882 Posts
    • 21,230 Thanks
    EachPenny
    Because as cryptocurrencies become more adopted over time I will depend on banks less and less.

    Similar to how in 1880 people were predicting that the internal combustion engine would wipe out the horse drawn carriage, but simultaneously need a horse drawn carriage to get from A to B.
    Originally posted by mcplums
    They also needed to wait another 30+ years for the technology to evolve to the point where it was a practical proposition, rather than something only suitable for experimentation and dedicated enthusiasts.

    Which returns us to the subject you don't want to discuss.... which is that virtual currency has to evolve to a state where it is a practical proposition (including regulation and policing) before banks will be 'wiped out'.

    My own prediction is that banks will evolve their own form of virtual currency (complete with regulation and policing) which will always outcompete others because it will have the benefit of security and stability.

    I'll go as far as to predict the name given to this 'virtual currency' will be "plastic" - and it will be common to hear people use phrases such as "put it on the plastic" to mean pay for it using the bank's 'virtual currency'
    "In the future, everyone will be rich for 15 minutes"
    • jonnygee2
    • By jonnygee2 10th Nov 18, 3:01 PM
    • 444 Posts
    • 443 Thanks
    jonnygee2
    I can see there has been an interesting discussion of whether or not what I was doing is a business activity or not- well I guess this is a good question, I guess you could argue I'm not, but I'm happy to accept I am. In which case I am agains the Ts and Cs. But as jonnygee2 mentioned this isn't particularly relevant, if the problem was just that I was using a personal account instead of a business account they likely would be more open about why I'm being shut down.
    There is, though, a slightly different point about the nature of your trading. If in any way at all you've been accused of trading other people's money (for example, accepting payments from someone to buy or sell coins on their behalf), you've committed a crime by running an unregulated financial business, which would certainly explain the banks reaction.

    A couple of days after the FOS contacted Santander, they told me formally that my account was being closed down. Which was progress, and I'm very happy
    So they haven't yet told you if the funds are being returned? It sounds like at least some of them will not be returned.

    Now what is super weird is that the customer service dude at Santander said that my account was being closed down at the request of the FCA.
    So it does actually sound like you are being investigated for running an unregulated financial business. The FCA will probably ask for more information and evidence before deciding whether to prosecute.
    • JGUK
    • By JGUK 10th Nov 18, 11:30 PM
    • 176 Posts
    • 28 Thanks
    JGUK
    The timing of the Halifax closure is strange, but 65 days to move your banking business elsewhere means its probably not been triggered by anything other than a they don't want your business anymore after the FCA have been in touch with them.
    Thanks
    JG
    • Thrugelmir
    • By Thrugelmir 10th Nov 18, 11:45 PM
    • 60,994 Posts
    • 54,195 Thanks
    Thrugelmir

    Incidentally, I did look at opening a business account with Santander, and being up front from the start about the purpose, but they explicitly disallow any businesses that are related to crypto in any way.
    Originally posted by mcplums
    Then you wonder why they've closed your personal account undertaking a similar activity in an underhand manner.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • mcplums
    • By mcplums 11th Nov 18, 10:21 AM
    • 18 Posts
    • 0 Thanks
    mcplums
    For anyone who is getting bored/annoyed at these unrelated posts on the merits of bitcoin I apologise but some posters (like EachPenny) ignored my request and I can't resist a good debate so still doing it here....

    They also needed to wait another 30+ years for the technology to evolve to the point where it was a practical proposition, rather than something only suitable for experimentation and dedicated enthusiasts.
    Originally posted by EachPenny
    Absolutely, agreed.

    Which returns us to the subject you don't want to discuss....
    Originally posted by EachPenny
    When did I say I didn't want to discuss it? If you read my post, I said I did want to discuss, just not here (which you have ignored).

    which is that virtual currency has to evolve to a state where it is a practical proposition (including regulation and policing) before banks will be 'wiped out'.
    Originally posted by EachPenny
    Agreed, certainly it has to evolve to a state where it is practical for everyone to use it.

    My own prediction is that banks will evolve their own form of virtual currency (complete with regulation and policing) which will always outcompete others because it will have the benefit of security and stability.
    Originally posted by EachPenny
    What will be the difference between banks' own virtual currencies and what they already offer? Will they have the properties of scarcity and decentralisation which is what separates existing virtual currencies and the , $ etc? In other words, why would anyone use these bank's new currencies?
    Last edited by mcplums; 11-11-2018 at 10:24 AM.
    • mcplums
    • By mcplums 11th Nov 18, 10:29 AM
    • 18 Posts
    • 0 Thanks
    mcplums
    There is, though, a slightly different point about the nature of your trading. If in any way at all you've been accused of trading other people's money (for example, accepting payments from someone to buy or sell coins on their behalf), you've committed a crime by running an unregulated financial business, which would certainly explain the banks reaction.
    Originally posted by jonnygee2
    Yeah that seems reasonable. Fortunately I havn't been doing that!

    So they haven't yet told you if the funds are being returned? It sounds like at least some of them will not be returned.
    Originally posted by jonnygee2
    They said I will get it back. Although I havn't yet. I need to wait for my letter confirming account closure before I can begin the process apparently.

    So it does actually sound like you are being investigated for running an unregulated financial business. The FCA will probably ask for more information and evidence before deciding whether to prosecute
    Originally posted by jonnygee2
    Ha- I would hope they ask for more information before deciding whether to prosecute!! The question is really, how did the FCA get interested in the first place? It's not like they have open access to everyone's accounts in the country. Perhaps Santander have a duty to send them details of things that look suspicious?
    • mcplums
    • By mcplums 11th Nov 18, 10:34 AM
    • 18 Posts
    • 0 Thanks
    mcplums
    The timing of the Halifax closure is strange, but 65 days to move your banking business elsewhere means its probably not been triggered by anything other than a they don't want your business anymore after the FCA have been in touch with them.
    Originally posted by JGUK
    This is even if the FCA have been in touch with them at all- perhaps it's just my volumes have been too high for a personal account. My bank accounts I do not use for arbitrage remain unaffected (touch wood).
    • jonnygee2
    • By jonnygee2 11th Nov 18, 11:29 AM
    • 444 Posts
    • 443 Thanks
    jonnygee2
    Ha- I would hope they ask for more information before deciding whether to prosecute!!
    If they do approach you I would seek independent legal advice first, because your openness has probably not helped, e.g. calling people your 'customers' and saying you do AML checks makes it sound a lot like you are doing something you actually aren't.

    Also, I really do want to stress what a huge risk you have been taking. I don't know what kind of AML checks you are doing, but even for the largest banks fully preventing money laundering is very difficult. Online systems like Creditsafe are in no way guarantees that money is safe.

    Simply doing the checks will not actually prevent prosecution. As a personal trader, if you help launder money you are committing a very serious crime.

    The question is really, how did the FCA get interested in the first place? It's not like they have open access to everyone's accounts in the country. Perhaps Santander have a duty to send them details of things that look suspicious?
    The bank will have reported to the NCA, who probably passed on your details to the FCA. It does not sound like the NCA investigation is still open, as your funds are being returned.
    • EachPenny
    • By EachPenny 11th Nov 18, 12:28 PM
    • 7,882 Posts
    • 21,230 Thanks
    EachPenny
    For anyone who is getting bored/annoyed at these unrelated posts on the merits of bitcoin I apologise but some posters (like EachPenny) ignored my request and I can't resist a good debate so still doing it here....
    Originally posted by mcplums
    I don't think anyone is getting bored/annoyed, like all threads people have the option of not reading posts they are not interested in. I did start by respecting your request, but since the discussion was being continued (including by you) I thought I might be allowed (in accordance with forum rules) to join back in.

    Besides, the discussion is not about the merits of bitcoin, but the interaction of virtual currency with the established banking system, regulation and policing. A topic you started the thread with. Rather than being off-topic, the points are germane to the issues you raise in respect to your relationship with Santander.

    The nature of bitcoin - and the lack of regulation and policing - is what has led you to the point where your bank has concerns about the legitimacy of your transacting and (apparently) has reported you to investigating/regulating authorities. Some of what you perceive as merits of bitcoin are the very thing which has landed you in this situation.

    Santander have opted not to facilitate business activities using virtual currency and yet by your own words you decided to ignore their wishes. Is it surprising they are a little concerned about this?
    What will be the difference between banks' own virtual currencies and what they already offer? Will they have the properties of scarcity and decentralisation which is what separates existing virtual currencies and the , $ etc? In other words, why would anyone use these bank's new currencies?
    Originally posted by mcplums
    It seems the point was missed... there is no difference because I was talking about the system which already exists. Most people's day-to-day banking has already been reduced down to bits being manipulated in computer databases representing transfers of notional currency units, which in the UK we just happen to call 'Pounds'.

    The existing system works, is generally trusted, and has the advantage of regulation and policing which gives users the comfort most crave. And as a backstop, the system is underwritten by the Government to the extent that users of the currency will only ever lose out if the country suffered total economic meltdown.

    In other words, why wouldn't anyone use these bank's new "currencies"?

    At the very least to the extent it will prevent the banks being "wiped out".
    "In the future, everyone will be rich for 15 minutes"
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