Bank Closed Your Account Over Crypto: Your Rights and the Route to a Replacement Account

If your bank terminates your account after money has arrived from a crypto exchange, that one banking relationship ends, but your participation in the payment system does not. The German Payment Accounts Act (Zahlungskontengesetz, ZKG) gives every consumer lawfully resident in the European Union a right to a basic payment account, and Section 35(1) sentence 3 ZKG expressly forbids a bank from refusing that right on the grounds that another account still exists, when that very account has been terminated. Everything that follows turns on that sentence.

This piece explains what happens legally when an institution ends a banking relationship over crypto payments: which notice period applies, why the letter usually gives no reason, which documents actually bring an anti-money-laundering review to a close, and in what order you approach the consumer arbitration body, the supervisor and the courts. The details relate to German law and to institutions based in Germany.

A Frozen Account and a Terminated Account Are Two Different Things

The two words get mixed up in everyday use, but they lead to completely different steps. A freeze is a temporary measure: the contract continues to exist, the institution merely holds payments or blocks transactions while an internal review runs. A termination ends the payment services framework contract itself. In both cases the balance remains your money; ownership is never in dispute, only access to it.

In practice that means: with a freeze you work towards release and give the bank the documents it lacks. With a termination that route is closed, because nobody can force an institution to continue an ordinary business relationship. Your objective then shifts to two other things: full payout of the balance, and a replacement account that is ready in time.

Often the two come one after the other. First a credit is held up, then a query follows, and if the answer does not come or the institution considers it inadequate, the termination letter arrives weeks later. Taking that first query seriously often prevents the second step.

Why Crypto Payments in Particular Trigger a Review

The trigger sits in the German Anti-Money Laundering Act (Geldwäschegesetz, GwG), and it is not one case handler's discretionary decision. Section 10(1) no. 5 GwG obliges banks to carry out continuous monitoring of the business relationship including transactions and requires a comparison with the information held on business activity and customer profile and, where necessary, on the source of the assets. A credit that does not fit the existing picture of a current account has to stand out under that rule.

Customer profile here simply means the pattern the bank has known from you over the years: salary, rent, direct debits, the occasional saving. A six-figure credit from a payment institution elsewhere in Europe does not fit that pattern, even if it is entirely lawful. It is precisely that deviation that triggers the review, not the word crypto on the statement.

Section 15 GwG comes on top. The provision requires enhanced due diligence as soon as an institution identifies a higher risk of money laundering in the individual case or in its own risk analysis. The extent of the measures follows that risk; the statute sets out no fixed list. That is why the response differs from house to house: one bank asks once, another freezes immediately.

With Bitcoin there is a technical detail that sharpens the problem. If you self-custody, you may have moved a holding across several addresses over years without that producing any evidence in the sense a bank means. The blockchain shows transfers, but neither purchase price nor counterparty, and without supplementary documents an institution can do little with it.

What Section 10(9) GwG Requires and What It Does Not Say

This provision is often cited in blanket terms in termination letters, and a look at the wording is worth the trouble. Subsection 9 sentence 1 states that a business relationship may not be entered into or continued if the obliged entity cannot fulfil the general due diligence obligations under subsection 1 nos. 1 to 4; sentence 2 then requires termination by notice or by other means. What is named there is identification, clarification of the beneficial owner, the purpose of the business relationship and classification as a politically exposed person.

Continuous monitoring including the source of assets sits in no. 5 and therefore outside that list. A missing answer to a source-of-funds question does not, then, automatically trigger the statutory duty to terminate under subsection 9. That does not make a termination ineffective, since the contractual route is sufficient for that in any case. But it shifts the weight in a conversation, because the institution is then relying on its contract law and not on a statutory duty that, at this point, is no duty at all.

Two Months: What Section 675h BGB Requires of the Bank

For an ordinary current account the notice period sits in the German Civil Code. Under Section 675h(2) BGB a payment service provider may terminate the framework contract only where the contract was concluded for an indefinite period and the right of termination has been agreed; the notice period may not fall short of two months. Subsection 4 also forbids the institution from agreeing a charge for the termination.

Two months is the statutory minimum, not a guideline. If your letter states a shorter period, it is worth looking into your institution's general terms and into the question of whether ordinary termination is meant at all. Alongside it, the general right remains to terminate a continuing obligation without notice for good cause under Section 314(1) BGB, where continuation cannot reasonably be expected of the terminating party after weighing the interests on both sides.

The practical consequence of that split matters more than the statutory references. Termination without notice requires a serious individual reason and is therefore open to challenge. Ordinary termination on two months' notice, by contrast, needs no reason, and as a rule you will not get anywhere against it. Your energy therefore belongs not in the fight over the old account but in the new one.

Why the Termination Letter Usually Gives No Reason

For an ordinary current account there is simply no statutory duty to give reasons. With the basic payment account the position is different, and looking there explains the silence in the first case too. Section 43(2) ZKG requires the reason for termination to be stated, but its second sentence expressly provides that this is omitted where it would endanger public security, in particular the rules on preventing money laundering, or would breach a prohibition on disclosure.

A termination letter without a reason is therefore neither an oversight nor a discourtesy but a case the statute provides for. Section 43(5) ZKG closes the circle: if the institution withholds the reason on those grounds, it must inform the competent authority of the termination and the reason. Under Section 46(2) ZKG the competent authority is the Federal Financial Supervisory Authority, BaFin.

For you one thing above all follows from that: pressing the point achieves nothing in this configuration, and irritation at the missing explanation takes you no further. The question you settle instead is whether a working replacement account is in place within the notice period and whether your balance arrives on it in full.

Proof of the Source of Funds Decides More Often Than Any Letter of Objection

As long as the account is merely frozen, the situation can almost always be resolved with documents. Proof of the source of funds is the unbroken account of where the money arriving in the account comes from. With crypto gains that requires a chain beginning with the euro you once transferred to the exchange and ending with the euro now coming back.

That chain can be assembled from:

• the exchange's complete transaction export covering the entire period, not just the year in question
• the bank statements showing your original deposits to the exchange
• purchase and sale confirmations for the individual positions
• a list of your own wallet addresses, where amounts were self-custodied in between
• evidence for special cases such as mining, staking, airdrops or a gift
• your tax return or the tax assessment for the year concerned, in so far as the gains are already recorded there
• a short covering letter that tells the chain in a few sentences and refers to the annexes

The last item is left out most often and works hardest. A stack of uncommented exports generates follow-up questions; one page of prose with clear references ends them. If you buy from the outset through a venue that supplies a clean export across all years, you have that evidence together in a few minutes; our comparison of crypto exchanges shows which providers make history and withdrawal routes available in a form a bank will accept. What a bank checks on the way in we have broken down in our analysis of source of funds on crypto deposits.

Where Proof Fails in Practice

The typical gap rarely sits where investors suspect it. Problems arise where an exchange has closed in the meantime and the export can no longer be retrieved, where holdings were bought over a peer-to-peer platform or privately, or where part of the assets dates from a time when nobody kept records. A reconstructed proof is better than none in such cases, and an openly stated break in the chain reads as more credible than a smoothed-over account.

The second common mistake is timing. If you only react when the termination arrives, you have missed the moment at which documents could still achieve something. The bank's query is the real deadline, not the date in the termination letter.

Your Right to a Basic Payment Account Under Section 31 ZKG

Here lies the most robust lever in the whole subject. Under Section 31(1) ZKG an institution that offers payment accounts to consumers is required to conclude a basic payment account contract with an entitled person, provided the application meets the conditions of Section 33. Entitled is every consumer lawfully resident in the European Union. Subsection 2 sets the institution a deadline: the offer must be made without undue delay, at the latest within ten business days of receipt of the application.

Under Section 34(1) ZKG an institution may refuse such an application only on the grounds named in Sections 35 to 37. That list is exhaustive, and two points within it are decisive for crypto investors:

• Section 35(1) ZKG permits refusal where the applicant already holds a usable payment account. Sentence 3 expressly excepts from that the case where the account has been terminated or the entitled person has been notified of its closure. The termination of your current account is therefore not an obstacle to the basic payment account but precisely the reason why the refusal falls away.
• Section 37 ZKG permits refusal where the same institution lawfully terminated an earlier basic payment account of the same customer within the past year under Section 42(3) no. 2. That bar applies only in relation to that one house.

The charge is not arbitrary either. Section 41(2) ZKG requires the charge for the services provided for by statute to be reasonable, measured against customary market charges and against user behaviour; a contractual penalty in connection with the basic payment account contract is impermissible under subsection 3. And the basic payment account itself is harder to terminate than an ordinary current account: Section 42 ZKG allows termination only on the conditions listed there, for instance after 24 consecutive months without an instructed payment transaction, and even then on at least two months' notice.

What is striking about the situation is that many of the same institutions now offer crypto themselves. The launch of crypto trading at the German savings banks shows how far sales and anti-money-laundering review have drifted apart within a single house.

The BaFin Procedure Under Section 48 ZKG and the Order That Matters

If an institution refuses you the basic payment account, you do not have to go straight to court. Section 48(1) ZKG opens an administrative procedure before the Federal Authority in three cases: where the application is refused, where no decision is taken on it within ten business days, or where the account is not opened within ten business days of the contract being concluded. The Federal Authority confirms receipt and conclusion of the procedure in writing or electronically.

If it concludes that the refusal does not hold, it orders the conclusion of the contract or the opening of the account under Section 49(1) ZKG. The burden of proof sits with the institution: it has to make out the conditions for a permissible refusal to the satisfaction of the supervisor. The Federal Authority may charge the institution a fee for the order. How the procedure runs from a consumer's point of view is described by BaFin on its basic payment account page.

Now the point at which most mistakes happen. Section 48(2) ZKG declares the application inadmissible where proceedings have already been brought before the ordinary courts on the same grounds and are still pending or have been finally decided, or where proceedings are pending before the consumer arbitration body competent under Section 14(1) UKlaG. Whoever goes to arbitration or to court first thereby closes off the fast route through the supervisor. The order is therefore a genuine fork in the road and not a formality.

Equally important is the limit of this procedure: it concerns the basic payment account alone. There is no procedure under Section 48 ZKG against the termination of an ordinary current account, and the supervisor will not get that account back for you either.

Arbitration or Court: What Is Left for the Terminated Current Account

Two routes remain for the old account, and both are limited in effect. The first runs through consumer arbitration. For the basic payment account, Section 43(3) ZKG even obliges the institution to point out in the termination the competent authority under Section 46(2) and the consumer arbitration body competent under Section 14(1) UKlaG, and to give the contact details. Where the house provides its own complaints procedure, the same duty to inform applies under subsection 4.

The second route is an action before the ordinary courts. That rarely makes sense with an ordinary termination on two months' notice, because no reason is required for it. With a termination without notice, with a withheld balance or with loss arising from a delayed payout, the calculation looks different. Both routes bar the administrative procedure on the basic payment account under Section 48(2) ZKG, which is why the replacement account sensibly comes first.

What to Change Before Your Next Withdrawal

The most effective part of this subject is the preventive one. An account that has been terminated is hard to get back; a withdrawal that is explicable from the outset is usually not held up at all.

• Announce larger withdrawals to your bank in advance, informally and in text form, with a line on the source.
• Do not break a large sale into many small transfers. Structuring looks like an attempt at concealment in anti-money-laundering monitoring and generates exactly the attention you want to avoid.
• Download the complete transaction export from your venues at least once a year and keep it outside the platform. Exchanges that have closed supply no history any more.
• Keep a second current account at another institution that serves solely as a fallback and is used regularly.
• Prefer venues with authorisation under the European crypto regulation and with a withdrawal route through an account in the euro area. Which providers meet that is set out in our comparison of regulated crypto exchanges.
• Keep your acquisition records as you go rather than retrospectively. A portfolio and tax tool produces the same history that later serves as proof of source; the selection is in our comparison of crypto tax software.

Frequently Asked Questions on Account Termination Over Crypto

May a bank terminate the account without giving reasons?

With an ordinary current account, yes, provided the contract is open-ended and a right of termination has been agreed; the period is at least two months under Section 675h(2) BGB. With the basic payment account, Section 43(2) ZKG requires reasons, which are however omitted where the anti-money-laundering rules or a prohibition on disclosure would otherwise be affected.

Will I get my balance paid out?

The balance is yours and is to be paid out once the contract ends. Delays almost always arise where an anti-money-laundering review is running in parallel or where no recipient account has been named. A second account at another institution resolves that point in advance.

Do I have to tell the bank I trade crypto?

There is no general duty of disclosure. You should, however, answer specific queries raised in the course of due diligence, because unanswered queries are the most common route from a freeze to a termination.

Will BaFin help against the termination of my current account?

The administrative procedure under Section 48 ZKG applies only to the basic payment account and only in the three cases named there. A general complaint to the supervisor is possible alongside it, but gives you no right to continuation of the old account.

How long does it take for a basic payment account to be in place?

The statute gives the institution ten business days for the offer after receipt of the application. If that period passes without a decision, that is already one of the cases in which Section 48(1) ZKG opens the procedure before the Federal Authority.

Can I simply switch to a direct bank?

That is possible, but it solves the underlying problem only if the new bank assesses the same payment flows differently. The due diligence obligations under the Anti-Money Laundering Act apply equally to every institution; what differs is solely the internal risk classifications.

Account Terminated Over Crypto: What to Take Away

1. Answer the query, not the termination. The moment at which documents work lies before the termination letter. Put the proof of source together from the exchange export, bank statements and a short covering letter; which venues supply a history usable for that is shown in the exchange comparison.
2. Secure the replacement account immediately. The right under Section 31 ZKG exists regardless of why the old account ended, and Section 35(1) sentence 3 ZKG takes away from the bank precisely the argument that you still have an account. Set up your ongoing documentation correctly at the same time, for instance with a tool from the comparison of crypto tax software.
3. Keep to the order. First the application for the basic payment account, then, on refusal or expiry of the period, the procedure under Section 48 ZKG, and only after that arbitration or court, because both bar the supervisory procedure. For future withdrawals you cut the risk most effectively through a regulated venue from our comparison of regulated crypto exchanges.

(As of September 24, 2026. This article is not investment advice and not legal advice. The state of the law, terms and fee structures change; check the terms with the provider before you buy.)