What Does It Feel Like to Suddenly Lose Your Bank Account Right Before Christmas?
Written by: Boaz Sobrado
Translated by: Chopper, Foresight News
On March 25, 2021, at a JPMorgan Chase branch in New York, USA
On December 19, about four weeks after I arrived in the United States and opened a JPMorgan Chase account, a bank email suddenly appeared in my inbox. The notification was devoid of any warmth, just a generic template notice: "This letter serves to inform you that we have decided to close your account."
The bank provided no explanation, only listing a series of instructions: destroy your debit card, cancel automatic payment agreements, update your e-wallet information, and await written notification. The letter claimed that subsequent correspondence would provide a complete explanation. However, to this day, that explanatory letter has yet to arrive.
I had thousands of dollars in my account, and various bills were set to be automatically deducted. I had just moved to a foreign country, and Christmas was just a few days away.
I was not the only one facing such a distressing situation. In November of the same year, Jack Mallers, CEO of the Bitcoin payment company Strike, experienced a similar painful ordeal. JPMorgan Chase suddenly shut down his personal and business accounts, citing "suspicious transaction behavior" as a vague excuse. Even more shocking was that Mallers' father had been a private banking client of the bank for many years.
Coincidentally, Russian lawyer Anya Chekhovich, who works for the anti-corruption foundation under Alexei Navalny, also had her bank account ruthlessly frozen after the Russian government designated the foundation as an "extremist organization." Although JPMorgan Chase eventually rescinded the account closure decision under strong public condemnation, the damage was already done. The wording of these account closure notifications was chillingly similar.
JPMorgan Chase is not an isolated case. In December, preliminary investigations by the Office of the Comptroller of the Currency revealed that between 2020 and 2023, nine major banks (JPMorgan Chase, Bank of America, Citibank, Wells Fargo, US Bank, First Capital Bank, PNC Bank, TD Bank, and Montreal Bank) engaged in systematic account closures. The targeted businesses included cryptocurrency companies, arms dealers, oil and gas companies, and various political groups.
The Trump administration has made this issue a priority. In August, Trump publicly stated that JPMorgan Chase and Bank of America had refused to accept over $1 billion in deposits from him, prompting him to issue an executive order directing regulators to thoroughly investigate such "politically motivated or potentially illegal account closures."
Most media reports overlook a key point: the essence of this event is far more complex than a simple political or ideological struggle.
The Mechanism Behind the Account Closure Crisis
Patrick McKenzie, a veteran in the payment industry, provided an answer in his influential paper "Seeing Like a Bank," where he incisively pointed out the shortcomings of the banking system: banks excel at tracking ledgers and confirming the ownership and flow of funds, but they are utterly incapable of effectively monitoring other information.
The root of the problem lies in the underlying system architecture of banks. The core processors of banking systems need to interface with numerous subsystems, leading to multiple points of information transmission failure. For example, the decision to close an account may be generated in System A, archived in System B, and then notified through System C. When you contact customer service for inquiries, the representative you reach has no authority to access any of the relevant systems.
To control costs, banks employ a tiered customer service system. Level one customer service can only read from a script, level two has slightly more authority, while the level three specialists who can explain the reasons behind issues do not handle incoming calls. This tiered model is an inevitable product of the low-profit nature of retail banking. It allows a high school student to easily open a checking account, but it also means that accounts can mysteriously disappear due to system failures.
At the same time, banks face stringent regulatory requirements. In various situations, banks must submit Suspicious Activity Reports, including for international wire transfers and customers with multiple nationalities. Ironically, sometimes merely the customer's awareness of the existence of a Suspicious Activity Report is enough to trigger the bank's reporting mechanism.
According to U.S. federal regulations under "12 CFR § 21.11 (k)," if a bank has submitted such a report regarding a customer's situation, the law prohibits the bank from informing the customer. The law requires banks to remain silent, and they cannot provide any explanation.
A Typical Reflection of Personal Experiences
When JPMorgan Chase sent that stern account closure notification without providing a reason, they may have been acting in accordance with the law, or it could have been a decision based on algorithmic risk assessment. This assessment may seem reasonable within the logic of the algorithm, but it appears absurd when explained in plain language. Having multiple nationalities, an overseas background, and a modest account balance makes such customers a liability for banks. I fit this high-risk profile perfectly.
This tiered customer service system also has special channels for high-profile individuals, such as human rights activists and regulatory personnel with large social media followings, who can directly connect with empowered technical support teams. Ordinary people, however, can only go around in circles within the voice navigation menu. Naturally, I was reluctant to call for inquiries again.
For me, having my account frozen and being unable to access my funds for weeks was just a minor inconvenience. But for those already living on the edge, it is akin to a nightmare that won't go away. Banks are meant to serve the general public, which is a necessity for social development. However, the high costs incurred to cover all demographics ultimately give rise to a system that is extremely unfriendly to "outlier" customers. As inclusive finance becomes the norm, the number of such "outlier" customers is actually far greater than one might imagine.
Cryptocurrency: An Alternative to the Banking System?
When I received that account closure email on December 19, what flashed through my mind was not the Federal Reserve's policies or debates about decentralization, but the tangible advantages of cryptocurrency. I had stored several thousand dollars in stablecoins (USDC) in a self-custodied wallet, which I could access at any time: no need to repeatedly press buttons in a voice navigation system, no waiting for checks to arrive, and no worrying about when I would get my money back.
For immigrants, expatriates, and globally mobile professionals whose life trajectories cross borders, traditional banks view their complex identities as a risk. A multi-national living background means undergoing multiple compliance checks, triggering multiple risk alerts, and leading algorithms to determine that they are "too troublesome and should not be accepted."
The original design of stablecoins was to provide a dollar-denominated value carrier for such individuals. They can circulate freely across borders, while these characteristics are seen as "risk signals" by traditional banks, making stablecoins an ideal solution for these needs.
The Trump administration's heightened attention to the issue of "illegal account closures" may inadvertently accelerate the adoption of cryptocurrency. When influential cryptocurrency executives like Mallers encounter account closure crises, it brings more attention to the issue. However, the core driving force behind the widespread adoption of cryptocurrency is not political factors, but the terrible experiences ordinary people have within the traditional banking system.
I am still waiting for that explanatory letter from JPMorgan Chase, hoping it will clarify the situation. But most likely, this letter will be just as vague as the initial email, citing company policies and procedural terms that seem reasonable on paper but appear arbitrary and unfair when applied to specific individuals.
Banks do not act with malice; they are merely institutions that have fallen behind the times, trying to manage the complex financial ecosystem with outdated systems. These systems often generate erroneous risk alerts, and sometimes, that alert just happens to land on someone right before Christmas.
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