Despite the growing acceptance of cryptocurrencies in the mainstream financial world, many users still face significant hurdles when trying to integrate their digital assets with traditional banking systems.
Panos Mekras, co-founder and CEO of blockchain fintech Anodos Labs, has been navigating the crypto landscape since the late 2010s. His experiences in Greece highlight a common issue: most Greek banks were initially reluctant to allow transfers to crypto exchanges. When one bank finally did, it subjected Mekras to rigorous questioning about the risks involved with his transactions.
Banking Barriers Persist
Mekras’s early struggles are emblematic of the broader issue: banks often label digital assets as high-risk, leading to account closures or sudden freezes without explanation. Even as public perception of crypto has evolved—from a speculative asset to a foundational technology for future financial products—the barriers remain.
“I tried to send money from an exchange to Revolut, and they froze my account for three weeks. I had no access to my funds during that time,” Mekras recently recounted. This experience is not unique to him. A January report from the UK Cryptoasset Business Council found that 40% of bank transfers to exchanges were blocked or delayed, with 80% of exchanges reporting increased friction over the past year.
Regulatory and Compliance Concerns
The council warned that blanket bans and transaction limits are often applied without regard to the legal status of the exchange. Revolut, one of the two banks in the UK that permits both bank transfers and debit cards, is among the platforms where Mekras experienced an account freeze. The bank operates with restrictions and is building its banking processes. A Revolut spokesperson explained that account freezes are a last-resort measure to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.
“A temporary freeze may occur if our systems detect irregular activity, such as frequent interactions with platforms exploited by fraudsters, or if we suspect the funds may be proceeds of crime or sanctions circumvention,” the spokesperson said. Since October 1, only 0.7% of Revolut accounts with crypto deposits have been restricted or frozen after investigation.
Onchain Solutions and Institutional Adoption
While some users like Mekras have turned to onchain tools and payment rails, fully detaching from the traditional banking system is not a viable option for most. In regions like China, where crypto on- and off-ramps are illegal, users resort to peer-to-peer (P2P) platforms or black markets. Other jurisdictions, like Nigeria, have eased restrictions, recognizing digital assets as securities in 2025.
Similar friction patterns are seen in the U.S., where the term “Operation Chokepoint 2.0” describes federal regulators’ informal guidance discouraging banks from maintaining relationships with crypto companies. In December, the U.S. Office of the Comptroller of the Currency (OCC) released findings on debanking practices by nine of the country’s largest banks, confirming that many still refuse to service crypto-related accounts.
The Path Forward
Despite these challenges, there is a growing shift in how traditional financial institutions engage with crypto. Major banks and financial infrastructures are increasingly building products and services tied to Web3. In the U.S., 60% of the top 25 banks are reportedly offering or planning Bitcoin-related services, including custody, trading, and advisory solutions.
Across Europe, regulated services such as crypto custody and settlement are being introduced by legacy exchanges and financial groups under the Markets in Crypto-Assets Regulations (MiCA). In the UK, HSBC’s blockchain platform was selected to support pilot issuances of tokenized government bonds.
Eyal Daskal, CEO of Crymbo, a blockchain infrastructure platform for institutions, notes that the challenges leading to account freezes are often linked to tooling gaps and risk frameworks inside banks. “The problem is that there’s a huge amount of friction because traditional banks don’t really have the internal infrastructure to interpret blockchain data in a way that fits inside their existing risk and compliance frameworks,” he said.
Until these gaps are addressed, the industry’s institutional embrace and retail friction will continue to coexist. The journey of crypto into the financial mainstream is far from over, but the road ahead is fraught with regulatory and technical hurdles that must be overcome.
About the Author
