Why German Crypto Exchanges Freeze Accounts Without Explanation

The withdrawal is stuck, the account is frozen, and support keeps answering in building blocks: "A review is under way, we are not permitted to give further details." It looks like evasion. It is precisely what the law requires.

Anyone who receives no explanation after a freeze is not facing arbitrary treatment. They are facing Section 47 of the German Money Laundering Act, the GwG. That provision expressly prohibits the provider from telling you about a suspicious activity report it intends to file or has already filed, and equally about any investigation that follows from it. Once you know this, you stop asking the wrong question and start asking the right one.

In Germany, crypto service providers are obliged entities under anti-money-laundering law by virtue of Section 2 (1) no. 2 GwG. It is the same category of duties that applies to banks, merely a separate number in the statute. If a transaction gives rise to reasonable suspicion, the provider is not merely entitled but obliged to file a report with the Financial Intelligence Unit, and to halt the transaction for the time being.

What triggers this is often a pattern rather than a specific allegation against you: an unusually large withdrawal after a long quiet spell, inflows from an environment classified as high risk, a change of residence, a change of device, a trade between private individuals.

The fact that you learn nothing is part of the design. A suspicious activity report the subject is told about would be worthless.

This is worth a close look, because a great deal of vagueness circulates online.

What matters is the scope. The three-business-day deadline applies to the reported transaction. It does not mean that an account automatically reopens after three days. If the public prosecutor prohibits execution or opens proceedings, the rules of those proceedings apply, and they know no such deadline.

This is why those affected go through two very different experiences. Some cases are settled within a few days, others drag on for months. Which one your own case will be cannot be told from the outside, and the provider is not allowed to say.

The decisive point is unspectacular. What shortens a review is a clean, documented path for the money, from the original source through to the transaction under scrutiny.

What does not help: pressure via social networks, chasing support every day, or asking for the reason. Support is not permitted to answer, and it is not the body that decides.