Fintech Account Restrictions, Frozen Funds and Digital Banking Disputes

Over the past several years, we have assisted a growing number of businesses, entrepreneurs and private clients facing account restrictions, frozen funds and account closures imposed by fintech institutions and digital banks.

While each case has its own factual background, certain recurring patterns have emerged. In many instances, clients first encounter operational difficulties, requests for additional information or unusual compliance inquiries shortly before access to their accounts becomes restricted or terminated altogether.

Based on our recent experience, account restrictions or closures frequently occur following:

• compliance, AML or Know-Your-Business (KYB) reviews;
• requests to amend account ownership, administrator rights or account access permissions;
• changes involving directors, shareholders or ultimate beneficial owners;
• corporate restructurings, mergers or internal group reorganisations;
• large incoming or outgoing transactions;
• increased transaction volumes;
• cross-border payments involving multiple jurisdictions; or
• requests to update corporate or beneficial ownership information.

Clients commonly report receiving generic explanations referring to "security reviews", "compliance checks", "internal investigations" or "final decisions", often without receiving meaningful information regarding the specific concerns, expected timelines or practical steps required to resolve the matter.

In many cases, customer support channels appear unable to provide substantive information, while escalation procedures remain opaque and difficult to access. Clients frequently describe lengthy delays, repetitive requests for documentation and responses that appear heavily standardised or template-driven.

We have also observed increased scrutiny in situations involving:

• directors, shareholders or beneficial owners residing outside the European Union;
• international corporate structures spanning multiple jurisdictions;
• fintech, software, consultancy, e-commerce, payments and crypto-related businesses;
• politically exposed persons (PEPs) or enhanced due diligence requirements;
• frequent international transfers;
• changes in ownership or control of a company; and
• businesses operating in sectors perceived as carrying elevated compliance risk.

In a number of matters, clients have informed us that although their accounts remained technically open, functionality became severely restricted. For example, accounts could only be used for limited withdrawals, incoming payments were blocked, outgoing transfers were restricted, or access to account administration functions was removed. Such circumstances may indicate an internal offboarding process rather than allegations of criminal conduct or regulatory breaches.

We are also increasingly encountering situations where clients believe that automated compliance systems, algorithmic risk assessments or AI-assisted monitoring tools may have played a significant role in the decision-making process. While financial institutions are subject to extensive anti-money laundering and regulatory obligations, concerns frequently arise regarding proportionality, transparency and the availability of meaningful human review.

Examples of Matters We Have Encountered

Business Account Restricted Following Corporate Changes

A foreign company sought to update administrator access following the departure of a former director. Despite providing corporate documentation confirming the change in management, access to the account remained restricted and the company encountered significant difficulties in regaining control over its banking arrangements.

Prolonged Compliance Review Affecting Business Operations

A company operating internationally became subject to an enhanced compliance review after receiving substantial customer payments. Although extensive documentation regarding source of funds, business activities and corporate structure was provided, the review remained ongoing for an extended period, affecting the company's ability to conduct normal business operations.

Account Restrictions Following Changes in Ownership Structure

A group of companies undergoing a restructuring encountered account restrictions shortly after changes were made to shareholder and beneficial ownership arrangements. Multiple rounds of additional information requests followed, creating uncertainty regarding access to funds and ongoing operations.

Simultaneous Closure of Personal and Business Accounts

An entrepreneur and several related entities experienced the closure of personal, investment and business accounts within a short period. The client sought assistance in understanding the basis for the decision, recovering funds and evaluating available legal remedies.

Cross-Border Business Facing Restricted Access to Operational Funds

An international company relying on digital banking services for payroll, supplier payments and tax obligations experienced prolonged account restrictions that significantly disrupted its day-to-day operations and contractual commitments.

Difficulties Recovering Funds Following Account Closure

A client whose account relationship had been terminated encountered substantial delays in recovering remaining balances and obtaining clear information regarding the procedure and timeframe for release of funds.

How We Assist

Our firm advises clients at every stage of fintech and digital banking disputes, including:

• assessment of the legal and regulatory basis for account restrictions;
• communication and negotiations with financial institutions;
• preparation of formal legal demands and pre-action correspondence;
• assistance with source-of-funds and compliance documentation;
• complaints to supervisory authorities, including the Bank of Lithuania;
• recovery of frozen or withheld funds;
• restoration of account access and administrative control;
• enforcement proceedings involving funds held with fintech institutions;
• representation in regulatory proceedings;
• court proceedings seeking release of funds, damages or other remedies.

We act for companies, entrepreneurs, investors, family offices and private individuals from a wide range of jurisdictions. Our experience includes matters involving payment institutions, electronic money institutions, challenger banks, digital banking platforms and other financial service providers operating throughout Europe.

If you have encountered difficulties with Revolut or another fintech institution, including account freezes, prolonged compliance reviews, blocked transfers or account closures, we would be pleased to discuss the available legal and regulatory options.

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