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TLDR
  • Fuck the banks
  • Recommendation: Set up a dedicated bank account for Bitcoin P2P trading and keep the balance low
  • Money in the bank is not your money, the bank controls how, if, and when you can use it
  • You can lose access to your bank accounts for several months without doing anything wrong
  • A P2P trade partner can ruin your privacy when they (are forced to) leak sensitive data
  • Fuck the banks
Introduction
Bitcoiners typically advocate for acquiring bitcoin P2P for good reasons, it is in the title of the whitepaper after all: "Bitcoin: A Peer-to-Peer Electronic Cash System"
The main reasons for using P2P are privacy and avoiding government regulated 3rd party companies. While you can get bitcoin P2P for services or goods, most people buy bitcoin using fiat money.
Unfortunately I have learned that is not without risk.
My horror experience with buying bitcoin P2P through the fiat banking system
I'm based in Europe and have a bank account with one of the largest banks in Europe (top 10). I started buying & selling bitcoin through HodlHodl (HH) and Peach in 2022 and all purchases/sales were done with fiat through a SEPA payment.
This is what happened:
  • End of April I suddenly couldn't make any transfers with my bank account. It was on a Sunday so I thought I would wait for a day to see what happens, could be an interruption with their services
  • A day later I got message that my account was blocked because of a fraud investigation and I had to call them. I immediately did so and they told me that one of my HH sales was flagged for fraud and the sender requested a chargeback. I explained my side and that I was not aware of doing anything wrong
  • I provided proof over e-mail that would show that I was not guilty of fraud: Chat messages from my trading partner, the HH contract, the transaction on the timechain, everything
  • I didn't hear back as they were 'investigating' according to them. A few weeks later I learned that they flagged three transactions, two from HH and one from Peach. The folks at Peach wrote and signed a latter that the chargeback against me was fraudulent and that I had met my obligations
  • Time passed by and not much seemed to happen. When I e-mailed and called them again they told me: "If we are investigating the legitimacy of funds, we immediately freeze the associated account to prevent any further transfers and the resulting damage, which is also our right as a bank. We do not provide updates on the progress of the investigation until it is completed, so indeed, you will not be kept informed in the meantime."
  • Late August they called me to ask for my side of the story as there was no documentation according to the person on the phone! There had been numerous phone calls and e-mails and I had documented all our communication, apparently they did not
  • They told me they would now go through everything I had sent and come up with a conclusion in a week. It wasn't until two weeks later that they called me and confirmed I didn't do anything wrong and they would unblock my bank account
  • In the end my bank account was blocked for more than four months
And this is what it did to me:
  • I lost access to roughly one year of net earnings and was not able to meet my financial commitments as expected. I had to come up with creative ways to meet my commitments. Luckily, I did not have to any bitcoin to do so
  • It severely affected my mental and physical health and relationship: Sleeping problems, stress, financial problems, nobody to talk to, focus issues
I hope someone learns something from my experience. Let me know if there are any questions :)
I treat banks like I do hot wallets. Keep a losable balance!!!!!!
I also exploit consumer protection laws. Every March since 2020 I claim $5k in theft. They have to legally replace the money while they "vestigate". By then that money is in bitcoin. They haven't shut me down yet either. I'm not doing anything immoral by doing this. I do this because I was once stranded in another country and couldn't get a ticket back because they were "vestigating" valid charges I previously confirmed were mine. Then Covid restrictions hit the next day and I got stuck, and lost a job opportunity. I will claim my $5k every March for the rest of my fucking life. In fact, I need to adjust that for inflation.
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Wait, so you defraud your bank for $5k every month, and you're treating this as some kind of moral victory?
Yeah, it's tough to figure out why banks are treating bitcoiners as shady. Weird, cannot for the life of me figure out why.
I know this is off-brand for the btc crowd, but jesus fucking christ.
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No not every month lol. Every March.
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Well done!
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Thanks for being an inspiration to us. Some heroes don't wear capes.
Banks and the whole system are free range slavery.
Small rebellions are one way to shut it down.
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You forgot another Fuck the banks in the TLDR.
Jokes aside, I'm sorry to hear this happened. I think your advice around not trusting the bank, only having small amounts on the accounts, having multiple accounts and so on is very sound. Most people don't realise how reliant they are on some of their accounts and how utterly powerless they will be if the bank decides to fuck with them. It should be common sense to have multiple accounts with different institutions to spread out risk.
If you don't mind sharing, I think some hints on the volumes you were moving around, in terms of € and/or transaction count, would help the community get a feel on where are the limits where the banks starts getting suspicious.
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To be clear, my bank was not getting suspicious, at least according to them. Three banks filed a case with my bank for a chargeback due to a fraudulent transaction. How this should have worked, I have no idea. Somehow I should have forced those buyers to make a payment to me? This didn't make any sense since I traded with two of them again at a later time. I'm sure at least two buyers didn't file a case with their bank against me, they confirmed this with me over chat on HH. The Peach user was fraudulent, so he might have filed a case with their bank against me. This is what Peach wrote in their letter: As further evidence of Mr. XXX’s fraudulent behavior, there is the fact that this person has previously been involved in (and lost) 7 disputes with other users on ourplatform. In Annex 3, the frauder uses another identity, here after revealed.
These three transactions were roughly ~10k EUR.
My bank did decide on a full account block because it was three different payments that were flagged, not just one. The bank is in full control, they never gave me any details on what I did wrong and what kind of case these other banks had against me.
I plan to file a complaint with the bank and potentially also request compensation. If anything comes out of that I will post that at a later time.
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I am sorry this happened to you. You are guilty until proven innocent.
Its important to develop small cell bitcoiner networks to help out during on/off ramps. Can you do it always? no Does this solve the problem? no. But but IMO its better to trade with friends than a random John Doe.
Submitting to fiat infrastructure comes at a cost, and even if the bank says someone filed a fraud complaint.. you will never know for a fact if this is fabricated or not. They are at war with us, they do not hold as much corn as we do and this is driving them mad.
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Next time use a pro bitcoin bank like https://www.xapobank.com/
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Thanks, I will have a look :)
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That you, Wences?
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We are all Wences
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Yes, I'm Wences Casares, haha.
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Wen Ces game?
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Good king wenceslas
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Is there not a method of transfering funds that are cash like? Here in South Africa we have this thing called eWallet and you can send money to a phone number and the owner of the phone number gets a pin and can pull the money out of the ATM based on a certain time period and its great for P2P trading
All my P2P trades I use PayPal and I know every time I make one, I could possible be rugged by them, and then sometimes I use cash to purchase azteco vouchers.
I guess if you have some voucher market you could do that, like swapping amazon vouchers or something but usually, those markets have stupid high premiums
I haven't used shitcoin stablecoins but a few P2P bros I know use them because its easy to get a hold of here with many local exchanges and then you go about your BTC buying either P2P or with swapping services
I've never done a P2P transfer with my bank, they give me enough shit as it is lol
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Have happened to me both with local banks and Revolut. With local banks I was able to talk out from the situation, Revolut just closed my account permanently after few months.
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Yeah, I lost my Revolut account as well!
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Not yet, will have a look, thanks!
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Did you lose it for p2p trading?
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Yes I did. It was not in agreement with their terms. They didn’t give detailed explanation. They also didn’t give me the option to change my use of their services. They closed my account and informed me I will never be able to open a new one with them.
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Very same problems everywhere. There is only one reliable option with flat deposits and cashouts with physical banknotes.
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Don't forget that there's a strong governmental push in Europe to eliminate cash. Large transactions are very difficult
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Yes, very true! I've grown up mostly in the digital age unfortunately so I'm bad at using cash myself as well.
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Yes. But then you have a trust issue in my opinion when selling bitcoin. They can give you counterfeit money. Unless they pull it from an ATM when making the trade.
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That's less of an issue of ATMs are modern.
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Yes. I have no issue with trusting our ATMs
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No idea. But I wouldn’t do significant trades in cash without taking precautions.
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I’ve heard some stories like yours. Funny thing that your money, is not actually yours if the custodian decides so.
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Sorry to hear this , but do not put what you are willing to lose in any fiat bank account, the money there is not even your money.
Also, heads-up for everyone: not just bank accounts, be careful with all those third-party payment processors too; Stripe was holding my money for more than eight months before.! I was so tired of dealing with all their automatic reply emails, which made me more toxic.
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Your trading partner was trying to cheat on you? Why was he asking for a charge back? I once lost a few hundred USD because of charge back on Paypal, I felt pretty stupid, but lesson was learnt.
My way to protect against that is to trade only small amounts, a few hundred $ so the risk stays low. Otherwise I don't see what can we do to avoid bank/scammers abuse. I'm now using mostly lnp2pbot that goes through LN, no problems so far. I guess a scammer could ask for a charge back, I don't know.
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Buyer is always a threat in p2p exchanges. Unfortunately. We haven't built at least a proper web of trust solution for trading p2p.
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To be clear, my bank was not getting suspicious, at least according to them. Three banks filed a case with my bank for a chargeback due to a fraudulent transaction. How this should have worked, I have no idea. Somehow I should have forced those buyers to make a payment to me? This didn't make any sense since I traded with two of them again at a later time. I'm sure at least two buyers didn't file a case with their bank against me, they confirmed this with me over chat on HH. The Peach user was fraudulent, so he might have filed a case with their bank against me. This is what Peach wrote in their letter: As further evidence of Mr. XXX’s fraudulent behavior, there is the fact that this person has previously been involved in (and lost) 7 disputes with other users on ourplatform. In Annex 3, the frauder uses another identity, here after revealed.
These three transactions were roughly ~10k EUR.
My bank did decide on a full account block because it was three different payments that were flagged, not just one. The bank is in full control, they never gave me any details on what I did wrong and what kind of case these other banks had against me.
I plan to file a complaint with the bank and potentially also request compensation. If anything comes out of that I will post that at a later time.
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Don't tell me... Couple of years ago my bank said they will cancel my bank account and report me in the bank system if I do not report and prove what kind of cryptos I bought. They wanted to know where I bought, from who I bought from. How many times. The amount and so on and on. They wanted to know even back to many years. I told them that there is nothing what force me to do this and they are welcome to close my account and report me. Since then many other banks kicked me out but never again I leave significant amount of money in the bank. FUCK THE BANKSTERS
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Yes, I also closed my account at a different bank for this reason. However, my current bank stated that if I didn't comply, they might put me on a blacklist shared with all the banks, thereby risking that I get excluded from the financial system.
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This same thing has happened to me multiple times with several banks. I used to do a lot of P2P trading on Paxful, it was a great extra source of income for a while until I started getting charge backs and otherwise flagging fraud detection algorithms due to very frequent trades.
Glad to hear you ended up coming out of this with your account balance intact. But definitely can relate to what you went through, I was pulling out my hair for over 3 months as well and now have multiple checking accounts to hopefully prevent myself from ending up in that situation again ( I no longer P2P trade as well).
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This is my biggest problem with bank methods for p2p trades. This creates a huge spiderweb of associated bitcoiners and all it takes is one bad actor to infect the web. Sorry you got caught up with that.
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100%. I'm also very concerned about the privacy of this method. I think they can find out a lot with surveillance technologies.
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Was the trade partner reliable? Hodlhodl and Peach has scoring mechanisms. You could decide to only trade with accounts that have sufficient trades and high enough scores.
I also use a dedicated account for my p2p trades, but I make sure to also do some regular buys with it from time to time. I don't use my main account though for p2p.
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The HH partners both had a high score, and I traded with them afterward as well. They didn't file any claim with their bank, according to them. I will never know the truth as the bank doesn't provide details regarding the fraud.
The Peach user was new and didn't have a rating yet.
For high-value trades, I only select well-regarded partners. Everybody should be able to join P2P trading though, so I also trade with new users, but only for small amounts.
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Completely agree. I sometimes also trade with new partners.
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Tough one. I expect more of this and it only to get worse.
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Fuck the banks.
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I would close the account immediately they unblock my account and remove all money, and tell them how disappointed am with their services.
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Oh shit. Dedicated bank acct is a smart idea...sorry that happened, fuckin' banks.
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Well, I learned a lot, and in the end, I didn't lose any funds. So in the end, I would say I'm better off now as I'm much wiser. I do want to avoid being locked out from the traditional system though, so one has to be careful.
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Interesting, thanks for posting
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We need banks like a ship needs a hole in the side! (at least the central banks, but more and more all banks are getting suspicious)
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Yeah, one has to use wise and not bank transfer systems.
Eventually, wise will shut down, then one will have to do money orders.
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What about a pro bitcoin bank like https://www.xapobank.com/?
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I have a Wise account as well. My Revolut account was already cancelled for P2P usage.
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Did wise ever pull that shit with you?
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No but I only used it a few times.
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These Fiat Bastards. I have an account with ''Consors'', 100% owned by BNP Paribas. These rats crash my credit card every 4-6 months to limit my withdrawings (anybody here knows for what reason). Than they have the guts to demand 10eu for the new one... that goes on since the clown virus.
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This sucks. I wanted to add something that is probably not clear enough...
Fuck the banks
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fuck the banks
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I did a podcast with p2p trader from Australia just recently and the issues are all the same.
Unfortunately the pod is in Russian.
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Any lessons learned from that?
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Plenty. Everything is kinda known, but I talked with him specifically from the standpoint of threat modeling so it turned out to be quite a systemic overview. Hard to tell in one sentence. Practically for Bitcoin traders in the so-called Western world official license is useless, it turns into self-reporting and eventual additional problems, exchanges aren't partners but almost adversarial actors, buyers as well may be scammers or scammer-driven muppets (like very old person with dementia who buys btc for nigerian persona) quite frequently.
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was it a Russian bank or Australian? Asking for a friend™️
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He is an officially registered sole trader in Australia and all his banned accounts in Australian banks.
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There is no chargebacks in Bitcoin, that is the whole point. Your proof is your TXID. I don’t get it. Fuck them anyways, buy and sell p2p with people you meet
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Fucked up. Which bank was it? I heard stories just like yours and have npw multiple bank accounts (fintech) as a backup. I'm still testing it. Revolut with RoboSats goes well now the 3 months.
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In a situation like this I'd be very interested to know:
  1. Is there anything stopping you from opening another bank account with a different bank and getting your employer to pay you into the new account.
  2. Would this happen if you owed the bank more than they owed you. For example, if you had a home loan.
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  1. #258556
  2. No idea :)
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Thank you for sharing your experience. After reading this nightmare, I'm ready to sleep now, and dream about a world with Bitcoin and no banks.
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lolz at the TL;DR first and last entry
Really sorry to hear about this. I'm glad you didn't have to sell any bitcoin/s. I've been hesitant to use P2P services for this exact reason. Seems like we're back to trust, but instead of large banks, anonymous individuals.... right back to where we started. Wish I knew a solution other than dealing only in goods/services in exchange for bitcoin. Would love any other ideas...
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Serious question, what is the best coin join in terms of privacy and unfuckwithability?
Wasabi, whirlpool, or joinmarket?
And could it have prevented the issues above?
How many suspicious activity reports did a certain son of a certain president receive?
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Last month the bank started to call me after every buy for me to confirm that "It was really me who wanted to do it" I think I'm gonna orangepill all their calling clerks
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I'm more or less in a similar situation.
I have bought BTC a few times on the LNP2P BOT, using different payment methods. The last time I use for the first time an account from one of the big Spanish banks.
A week later my account was blocked, they said that someone has tried to log into my account and they froze the account for my own safety
Three weeks has passed and I can't access my funds.
I'm lucky because I have some other funds in another bank.
But I don't want to think if this blocked account was my main or only account....
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Good luck, I hope everything resolves in your favor!
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Finger Cross
I hope to solve it before I run out of fund in the other account.
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Thank you a lot for this feedback. I was investigating ways to get around that in case it happens to me. I feel your pain. If my bank account shut down I would be without money besides Bitcoin. But with Bitcoin I would be without means of conversion to the local currency. I am still using KYC with Swan Bitcoin because I am too scared to lose my bank account (can't afford living without fiat at the moment and have no friends or family to help in the worst case scenario) but from what I have seen the best way to get p2p Bitcoin could be through meetups. Never been in meet ups but apparently there are people willing to buy or sell in cash. Furthermore in a meet up starting using Vexl could make sense to avoid transfers and do physical exchanges.
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Yes, I see trades happen at meetings where I go, typically using Peach. I wouldn't do this for large amounts though.
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I like P2P, I used P2P. But then I said, what the fuck, I don't need to buy anymore bitcoins, I can just EARN THEM.
So that I did, years ago, I started using Bitwage (2015). Yes, is some kind of KYC, but I don't care too much, they use anyways a bank account THAT IS NOT IN MY NAME! And I get BTC straight to my BTC wallet. Nobody will take them from me! Taxes? FUCK THEM! Who in the right mind is still paying taxes anyways?!
Then after a while I start pushing my client TO PAY ME IN BITCOIN!
This is the fucking key: demand to be paid in BTC. STOP buying BTC.
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100% agree. I'm busy starting my own business and will promote bitcoin payments. That way I'm less reliant on buying bitcoin.
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I'm going to give this a try. Thanks!
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0 sats \ 0 replies \ @TomK 8 Feb
yes, sorry for you. those fucking banks! for this reason, I myself usually still go to an expensive Bitcoin ATM to stock up on Bitcoin anonymously. my credit cards have been blocked over the years and there have always been problems with various European banks.
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You know you can open more than 1 bank account right?
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Yes. But I couldn’t get my money out for four months. Furthermore I had issues with several automated payments like my mortgage that weren’t so easy to change to a different account at such short notice.
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Damn Banksters
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this might be a stupid question that can draw the ire of some folks, but what are the most, uh, "bitcoin-friendly" banks that are out there? would credit unions have a leg up over a traditional bank in this case?
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A good pro Bitcoin bank that I use is https://www.xapobank.com/
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In Germany, a regional bank "Volksbank Raiffeisen Bayern Mitte", they even offer bitcoin together with a private key to self custody. They are super bitcoin friendly and understand the space we are in. I think only german residents can open an account.
I don't have an account yet but thinking about to open one to have an account in case the other fuckers close mine.
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I got banned from two so far, so I know which are not ;). Revolut was one of them.
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kinda ironic considering how you can buy crypto on Revolut right lol
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not sure there are btc friendly banks.. Try neobanks
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Xapo Bank is a pro bitcoin bank, they even support lightning: https://www.xapobank.com/
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gotta love these tax havens
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It was a traditional bank. I don't want to doxx myself or cause further issues in the future, so it was one of these: HSBC Holdings (UK) BNP Paribas (France) Crédit Agricole (France) Banco Santander (Spain) Intesa Sanpaolo (Italy) Deutsche Bank (Germany) Barclays (UK) Groupe BPCE (France) Société Générale (France) UniCredit (Italy) ING (Netherlands) Deutsche Postbank (Germany) Rabobank (Netherlands) KBC Group (Belgium) Nordea Bank (Finland)
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