Why we block or restrict accounts - and how to reduce the risk

We know it can be super annoying when your account is restricted. Especially if you believe you’ve done nothing wrong. Please understand that when we take an action like this there’s always a reason, and it’s not something we take lightly.

So let’s dive in and explain why we block or restrict accounts, and what you can do to reduce the risk.

Keeping you safe and complying with regulations

We’re a regulated business. That means we have to follow a lot of very specific rules and codes of conduct. In the US, we are a Money Services Business registered with the Financial Crimes Enforcement Network, also known as FinCEN. In the UK we are registered with the FCA (Financial Conduct Authority) and in the Seychelles with the FSA (Financial Services Authority). These bodies keep us in check and make sure we’re following all the relevant laws.

Around the world, there are tough anti-money-laundering and counter-terrorism financing rules intended to ensure businesses like ours implement strong systems to help combat the fight against financial crime and keep customers safe. Below we have listed some instances where we may have to take action on our customers’ accounts.

We restrict accounts when we think your money might be at risk

If our risk systems detect someone else could have access to your account, they can automatically restrict the account to protect your money. This happens rarely and only a very small proportion of new logins are flagged as high risk.

We’ll reinstate your account once we’re happy that it’s definitely you.

Restricting accounts can save people from losing money

For example, money muling is a type of fraud where people are coerced or paid to funnel illegal money through their accounts as a way to launder money. If coerced, these people could stand to lose their entire life savings if financial platforms didn’t do something to step in. If paid, these people are complicit in a serious financial crime and will be prosecuted.

So, for companies like Uphold that are trying to innovate and improve peoples’ lives there’s always a difficult balancing act between stopping people from having access to their money and protecting them from criminals draining their account. 

Ours is a highly regulated industry, and for good reason. These laws exist to help keep your money safe and stop bad actors.

We also restrict accounts when we suspect criminal activity

To comply with the rules and regulations above, we continuously monitor our platform for any activity that appears out of the ordinary. We can’t explain in detail what we’re looking for, otherwise the bad guys know how to get around our controls! But here’s some broad strokes insight into what may trigger a review for suspicious activity:

Our systems notice unusual activity: There are a number of factors that may trigger a review for unusual activity. We pay special attention to accounts that are involved in transactions that tick some or all of the boxes of criminal activity, such as money laundering.

We identify a high-risk customer: In simple terms, high-risk customers pose a higher risk to our users and Uphold than others. There are a few reasons why someone may be classified as such. Sometimes we’re told by another financial organization or the regulator that an account has been linked to financial crime elsewhere. In that case we’ll restrict the account on our side to assess the risk and decide on next steps.

Law enforcement tells us to block an account: If a customer of ours is associated with an ongoing investigation, we may be asked by law enforcement to put a hold or block on the account. We’re committed to doing our part in keeping the ecosystem safe for everyone!

What happens next

We’ll always be in touch if we need to restrict your account. Depending on the reason, the review may take a few days. We’ll do our best to keep you in the loop throughout!

In the majority of cases, our reviews are completed quickly and we’re able to return your account to its former glory! And of course we’ll drop you a note to let you know once the review has been completed. 

In the rare case where we decide that we can no longer offer you an account, we’ll do our best to explain why. But as outlined above, there are certain instances where we can’t disclose the reasons due to legal constraints.

There are some false positives

On fairly rare occasions, we’ll block an account that looks suspicious but after investigating find there’s a perfectly reasonable (and legal) explanation for the activity. When this happens we unblock the account and apologise to our customer.

Was this article helpful?
92 out of 212 found this helpful