As interest in cryptocurrencies continues to grow more and more people are venturing to operate with crypto assets. According to the information handled by the Bank of Spain, close to one in ten Spaniards is in possession of some crypto asset despite warnings about volatility and risk from the authorities. Sometimes the transfers that we try to make from our bank to cryptocurrency buying platforms can end up being cancelled. Why does this happen? We explain it in this article.
The Spanish banking regulator announced that the country’s entities have the ability to block purchases of cryptocurrencies if they think they are protecting the client. against security threats. This is because the bank you may suspect possible phishing is taking place with the consequent theft of credentials, according to the statement from the Bank of Spain.
Blockchain technology makes it possible to move large amounts of money through the network, without the possibility of being traced or that the transactions can be reversed, in case of error or fraud the process to recover the funds is not easy. The Bank of Spain explains that there are frequent fraud crimes in which an individual has their bank passwords stolen to use their savings to buy cryptocurrencies. These coins are later transferred to untraceable accounts and it would be very difficult to trace those transactions. Therefore, given the suspicion of unusual activity, banks block operations and check with users if they are really trying to buy this type of asset. Something similar happens with operations on adult sites, casinos, etc. especially if the user has not operated with this type of service before.
In order to prevent this, the bank can block the purchase of cryptocurrencies if you have detected any suspicion of strange activity or crime, which may cause some users to mistakenly experience a block on their transactions when attempting to purchase cryptocurrencies. Accounts are also blocked for the purpose of detecting and analyzing possible illegal activities in some cases.
In addition, entities prevent operations to prevent money laundering, comply with restrictions on customer operations, and other regulations. It is common for the message we see in these cases to expressly cite Law 10/2010 generically unless the bank categorizes the activity as unrelated to said law and blocks it for other reasons.
Entities are obliged to control strange behavior on the part of their clients and study cases that are suspicious. If there are suspicions of money laundering, the account can be blocked until the suspicion is resolved. Even so, before reaching this extreme, the Bank of Spain explains that after paralyzing the suspicious operation they contact the user. Of course, this does not always happen, since if there is evidence of illegality, the bank is authorized to block the account without prior notice, sometimes giving a generic notice to the alleged offender. To avoid these situations, it is recommended to ask the entity that provides us with the bank account if they allow trading in exchanges beforehand.
Banks are obliged to carry out certain controls before operations due to the Law on the prevention of money laundering and the financing of terrorism adding a verification layer when operations are requested. Therefore, when operating with crypto assets you can notify your bank or carry out test operations first to check that these preventative measures are not triggered by unusual activity.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.