Bank of America not randomly closing accounts of Coinbase clients

On July 13, Coinbase CEO Brian Armstrong ran a poll on Twitter to assess whether Bank of America (BoA) is closing accounts that transact with the exchange as alleged.

Is Bank of America closing accounts of Coinbase clients?

The poll has over 13,100 responses, with 8% of respondents saying their accounts have been closed. Still, this represents a minority of the total who are voting to mostly deny this claim.

Voting ends in 11 hours when writing on July 13.

The recent vote was prompted by Muneeb Ali’s claim that his bank account was abruptly closed after being active for 15 years. He appears to blame his interactions with Coinbase as a reason. Ali is the co-founder of Stacks that enable smart contracts on the Bitcoin network.

Nonetheless, it should be noted that crypto is legal in the United States. Additionally, compliant accounts can have their crypto transactions processed by banks.

The account freeze is when Coinbase is under regulatory scrutiny, and more global banks are wary of crypto firms.

Meanwhile, there have been no significant reports of Morgan Stanley or Goldman Sachs closing personal bank accounts transacting to Coinbase or any other major crypto exchange.

Regulators scrutinize crypto firms

Since the crypto winter of 2022, the crypto scene has been volatile and fragile, punctuated by major incidents like the depegging of USDC and hacks.

Moreover, regulatory authorities, particularly in the United States, have taken strict action against the industry, causing banks to become more cautious about working with crypto companies like Coinbase.

For example, in early June, the SEC sued Binance.US and Coinbase, alleging that they facilitated the trading of crypto securities. Some cited as examples, including cardano (ADA), are listed in Coinbase.

Despite the uncertainty, mainstream financial powerhouses, including BlackRock, prefer Coinbase rails to custody funds, details from their spot bitcoin exchange-traded fund (ETF) application to the SEC shows.

PayPal, the payment processor; Grayscale, the digital asset management firm behind GBTC; and Vanguard, one of the world’s largest asset managers, continue to use Coinbase Custody to store coins.

Recently, it was reported that Vanguard bought more stock from US-based bitcoin mining firms, including Riot Blockchain.