Frozen Crypto Account? It's Not the Exchange Being Secretive, But German Law

When a crypto exchange account is frozen, it can be frustrating and confusing for users. In Germany, under Section 47 of the German Money Laundering Act (GwG), providers are prohibited from informing customers about a suspicious activity report they intend to file or have already filed.

This provision aims to prevent tipping off, allowing authorities to investigate without interference. However, it can leave users in the dark about why their account is frozen and what's happening behind the scenes.

According to German law, providers are obliged entities under Section 2 (1) no. 2 GwG, similar to banks. They must file a report with the Financial Intelligence Unit if they have reasonable suspicion of money laundering or terrorist financing.