> Dear [redacted] Inc.
> A review of our records indicates that we are unable to retain your above-referenced account(s) (the "Accounts") at JPMorgan Chase Bank, N.A. (the "Bank").
> The terms and conditions governing the Accounts ("Account Rules") provide that the Bank may close your Accounts at any time. Although the Account Rules do not require the Bank to provide you with advance notice of the termination of the Accounts, as a courtesy, please be advised that the Accounts will be terminated and closed after the close of business on 08/26/2013. Any items presented for payment on the Accounts and not paid prior to termination will be returned unpaid. If the Accounts were covered by Overdraft Protection, as that term is defined in the Account Rules, such Overdraft Protection will terminate with respect to the Accounts on the Termination Date.
> Please do not deposit checks to the Accounts within five (5) business days of the Termination Date or any earlier date that you close the Accounts. Please arrange to cause any Automated Clearing House or ACH deposits or transfers to the Accounts to be terminated prior to closure. Provided that no checks have been deposited to your Accounts within the five (5) business day period before the Accounts are closed and no deposits of any kind have been made to your Accounts within a two (2) business day period before such closure, upon closure the Bank will, at your risk, mail to you at the address set forth above a check for the balance of your Accounts, less any service charges assessed to the Accounts. If deposits are made to the Accounts prior to closure inconsistent with the foregoing, the Bank will mail your check as soon as reasonably possible following closure of the Accounts. If you wish to make other arrangements for receipt of any funds remaining in the Accounts or if you have questions, please contact 1-877-691-8086 OPTION-NUMBER-1.
> Notwithstanding the Bank's intent to allow the Accounts to remain open until as set forth above, the Bank reserves the right to close the Accounts earlier, at any time, for any reason, without notice.
> Sincerely,
> Chase Operating Loss Prevention
I assume most of the big banks probably have similar language, which would be a huge red flag to me for a small business account. But what about banks like Mercury Bank, mentioned in the article as being more supportive of small businesses? Do their terms of service provide at least some kind of guarantee about due process if the bank has a question about your account?
For "prevention," seems like a great way to lose customers ...
Out of interest, why would you do that after your previous experience with them?
I can't remember why I chose them for a business account. At the time I was working under the assumption that this was a "lightning strike" type of event which could have happened with any bank. I'm more inclined to believe it's Chase-specific now, or at least more likely with Chase, esp. based on other anecdotes in this thread! I was also inclined to believe that most large banks are terrible. For example, I have experienced extremely poor customer service with B of A, and Wells Fargo is a very sleazy company. However, my experience with Chase is by far the worst I've personally experienced.
I'm a very happy customer of Mercury Bank for my current business, FWIW.
> I've opened another business account and a personal travel credit card with Chase, both of which were shut down within weeks
What exactly is a "personal travel credit card"? I never heard that term before.
Believe it. Our account seems to have been closed due to a KYC issue, and the bank, by law, cannot tell you any details. See this comment: https://news.ycombinator.com/item?id=41333832
And, yes: we tried every avenue to get more information, including having an attorney write a letter. As you can imagine, this was quite concerning for our company. We wanted to understand if there was some piece of information that might lead other banks to close our account. As I mentioned in another comment, none of our other accounts were closed - only this Chase account.
I tried again to get more information when the Chase accounts I opened, for another business and subsequently a personal credit card, were closed, although by that point, the only logical explanation was my connection to the business bank account that had previously been closed and I didn't have much hope that I'd get an answer.
Also: to be blunt I'm not sure what gave you the impression that I'm looking for advice. I was relating an old anecdote that was relevant to the OP, not asking for help. I just stay away from Chase. At this point I know that I'm blacklisted with them. I have no issue with other banks.
> What exactly is a "personal travel credit card"? I never heard that term before.
"Personal" as in: this was a credit card for me personally, not a business credit card. My point is that I seem to be blacklisted by Chase even for _personal_ accounts unconnected to the business whose account the closed. I assume you've heard of a "travel credit card", but if not: https://www.nerdwallet.com/best/credit-cards/travel
Credit cards typically come in two flavors: cash back and travel. Cash back is self explanatory, travel cards reward points instead (cash equivalent of 1 point is $0.01 at least for the US). These points can be transferred to other accounts to take advantage of things like reward seats on airlines.
I had about $80,000 in IRA/CD's. I'd created & contributed to them over a period of 35 years.
Last year, it's time to retire, and Citibank won't give me half the money. It seems that some CD's are for "Cliff Stoll" and some for "Clifford Stoll".
Citibank Retirement demanded a "Marriage Certificate, Divorce Decree, or Court Order" to demonstrate that "Cliff Stoll" is the same person as "Clifford Stoll".
Took more than 8 months, dozens of emails, five visits to Citibank offices, and a letter to the Citibank president, to shake loose money that I'd deposited across three decades.
Related to an earlier comment I posted on a different thread https://news.ycombinator.com/item?id=41316889 , I didn't name the "national bank", but I now feel perfectly comfortable outing "Citibank" as the national bank that I will no longer (personally) do business with. Corporate stuff is a different matter.
As a matter of policy, they do not empower their front-line (personal) banking CSR reps, and even 1st-level escalation folks. They're basically nothing more than stenographers.
After 20 days of back-and-forth with non-answers, I finally sent them a certified letter giving them 30 days to "take action" or "explain non-action" on a specific dispute amounting to ~$5k.
The responded with a non-reponse bizarre marketing letter in 10 days.
I called to verify the prior letter was "on-record" in my account. Given the nature of the postage, it was already verified delivered.
Moving forward, that 15 year+ line-of-credit is just going sit on their books until they close the account. There is no longer a fundamental basis of forthright communication, confidence in competence, and trust to move forward.
This appears to be the original sin in most of these scenarios.
Eventually, automation and predictive analytics will break.
If you do not have a customer service org empowered and staffed to (a) investigate what went wrong & (b) make it right, then you will lose customers.
And maybe you're fine with that trickle, but know that the Kafkaesque burning of a relationship means they will never do business with you again.
For all its faults, Amazon is an example of a company that still remembers this and seems to empower its support folks. As a counterexample, I severed a 20 year relationship with Bank of America because they disempowered their retail staff to the point of uselessness.
> The responded with a non-reponse bizarre marketing letter in 10 days.
>I called to verify the prior letter was "on-record" in my account. Given the nature of the postage, it was already verified delivered.
What was the purpose of the certified letter? you can use that in court but did you take any further action?
Cleaning out my attic last month, I just found a stash of punch cards left over from the 1980's. Some paper-tape that has my phd dissertation. And a fortran manual from my high school's IBM-1620. Oh my...
The good news for this is that my primary stock has gone up 80% (since this issue became apparent, just two years ago), and it has encouraged me to live more frugally. Eventually?
Unrelated: thanks for the awesome Klein Mug, Cliff!
This happened at my previous house, except with an additional twist: the street name was changed to an identical streetname, less than a mile away, but within a different city.
Adding to the confusion, my address was duplicated on that other street with a commercial brokerage which often gets sued. How do I know about these lawsuits? — because several process servers showed up (over about eight years living there) to sue the other address. They never believed my factual explanation: the numbers repeat on the same road, so closely ("yeah, ok buddy").
I had to give my origin bank everything imaginable, including address, phone, fax of both the destination bank as well as the branch.
All of my ID obviously and the destination account number.
Weeks later I get a message from my destination branch saying they got some money in USD for someone that had a subset of my name but no account information whatsoever.
I said it was for me and thankfully that was it.
What happened?
Eventually I got something that looked like a traceroute of the transfer.
The origin bank used Citibank as an intermediary and at that step everything but the amount, name of the destination bank and my first and last name was lost.
Completely obliterated.
Never trusted them ever since.
Yeah, we had another issue with Chase like yours and the article's. Finally got around to letting Chase know that a family member had died, took a little while, because, duh. We were all on the accounts together. So, Chase then goes and makes us all down as dead. Freezes everything, then started up the process to put up the money for probate to our various estates (?!). Luckily, we get daily emails about this and were able to go and start everything back up again. It's still no where near finished up, after about 5 months of weekly visits. They managed to make us undead in their system, but then a week later it would revert. No one ever knew what was going on and still don't. Eventually managed to get a check of all the cash in the checking and savings accounts and have gone and put it all with a local credit union. However, about $120k of retirement savings from my dead family member are still locked up in Chase. No amount of records from the county or newspaper obits or hospice forms can convince Chase that the deceased is actually dead. They, and I am not joking here, said that my family member has to sign off on declaring their death to Chase.
Chase, never again.
I want to be clear to the other readers here: This is your warning that 'something is rotten in Denmark'. When another large fiscal crisis starts up again in ~3 years, you'll now know it's because these banks have become too big to operate, not just fail. Cleaning out that mess is going to be a lot harder than 2008, as all their internal records stink.
Are you still doing the hats & bottles or did you retire from that too?
At the moment, retirement mainly means "start taking out required minimum distributions".
All the same, I wonder: How do you retire from a marginally profitable nano-business built upon glass mathematical shapes? How'd I ever reach 74 years old?
I've known people who couldn't get their name into the system (no last name), couldn't fit their names into the system (two last names, no hyphen), changed family name (spouses), change first name, put in a different first name (sometimes Timothy, sometimes Tim), their name didn't _fit_ in the field (too many characters, unexpected character encoding), trans people.
This should be expected by computer systems, and expected by staff.
I loved your book! I loved the way it reads. So fluid and interesting.
:)
Glad you got things straightened out.
Yesterday's SMBC made me think of you: https://www.smbc-comics.com/comic/outside
Try a credit union if you want to avoid banks.
At least I know never to do business with Citi.
> After months of back-and-forth, [...] I finally got my money.
I didn't find any mention of a lawyer in the article.
When you realize you're dealing with people who aren't operating in good faith, seriously consider consulting a lawyer.
(A harder problem is realizing when people aren't operating in good faith. Especially if you're a Pollyanna, or decent folk dropped into the big city.)
> consider using my referral link to open an account with Mercury
I'm not going to click a kickback link on a piece like this, and I'm going to disregard the recommendation.
If the goal is to warn people away from something, or to make a positive recommendation for something else, why add an obvious conflict of interest that didn't have to be there?
One option is that the author found/got a referral deal with an alternative provider, so thought they could write this article complaining about a competitor.
Or... They were so pissed with Chase due to this nightmare they had to go through, they looked for alternatives, found something, so they mentioned it in the post.
Disregarding is fine as you don't know if they are honest, at the same time I wouldn't attribute evil intentions either.
It's like when a native iOS developer says the best apps are truly native. It could be that they tell you that so that you hire them and their niche stays strong... or they really believe it and that's why they are iOS developers.
Funny enough, I recently opened a Chase business checking because of this "bank not bank" news: https://news.ycombinator.com/item?id=40480159
I still have a different business checking with a Mercury-like fintech provider. Chase freezes accounts, Fintech startups go under.
Chase already froze my business credit card once. I had to send them a deed of a house that I had already sold. It made little sense.
On the fintech bank side, my biggest client cannot make transfers to that account. Their payment system throws an error when they try to ACH to it. That plus the news about Synapse going under made me want a chase.
So I don't really know what to do. I now have multiple business accounts, multiple personal accounts. I want to find like a good credit union maybe?
What's clear is being in small business requires building tolerance for money uncertainty that wasn't as necessary when I was an employee.
I feel for the author. That all sucks. I enjoyed the 'Yuppie Nightmare' reference. Many thanks for sharing.
Going to the local branch stopped them from sending any more demands for documents so it seems it really was Citibank who had sent those demands to me. But for them to ask for my password in a phone conversation is a huge Red Flag right? And they never sent me a confirmation that issue was resolved.
I should have reported them for asking for my password, but did not know where should I submit such a report.
Big banks are too big.
> In the specific case of “Why did the bank close my account, seemingly for no reason? Why will no one tell me anything about this? Why will no one take responsibility?”, the answer is frequently that the bank is following the law. As we’ve discussed previously, banks will frequently make the “independent” “commercial decision” to “exit the relationship” with a particular customer after that customer has had multiple Suspicious Activity Reports filed. SARs can (and sometimes must!) be filed for innocuous reasons and do not necessarily imply any sort of wrongdoing.
> SARs are secret, by regulation. See 12 CFR § 21.11(k)(1) from the Office of Comptroller of the Currency:
> No national bank, and no director, officer, employee, or agent of a national bank, shall disclose a SAR or any information that would reveal the existence of a SAR. Any national bank, and any director, officer, employee, or agent of any national bank that is subpoenaed or otherwise requested to disclose a SAR, or any information that would reveal the existence of a SAR, shall decline to produce the SAR or such information, citing this section and 31 U.S.C. 5318(g)(2)(A)(i)...
Step 2. Find out it's actually a fucking nightmare
Step 3. Finally stop thinking everyone who worries about obstacles you assume don't happen are tinfoil hat weirdos.
It's always step 3 that gets people.
[0] https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Ban...
By trying to do this at multiple branches across the country OP likely made the problem worse as those actions raise suspicions even more.
With that much money after the first day of inaction by support he should have CC’d every department from legal@ to the C-suite.
At the small regional bank I used to work for accounts were assigned a home branch, typically where the account was first opened, and that branch had enhanced responsibilities in terms of servicing and maintaining the relationship.
Chase is big enough that their KYC fallout queues probably have an entire team working them, and it wouldn't matter who else you CC on the email.
("Hey Joe, come quick! Just got an email from someone claiming they need their money we just froze...")
The trick is to become so incredibly annoying that some CxO / VP is going to bump you ahead in the queue and assign a dedicated customer experience manager.
Personally, if a bank were to steal $180.000 of my money, a few weeks in I'd probably start considering sticking "Chase is a criminal organization" posters on the doors of their regional headquarters, or getting tickets to industry events just so I can ask them at the Q&A where my money is. They may think "computer says no" is an acceptable answer, but that doesn't mean I can't make their life a living hell too - so why not make my problem our problem?
Any time I’ve ever had issues that weren’t resolved within 24hrs by t1 support I’ve sent a succinct, mostly emotionless email to anyone I could find and it’s worked every time. Phone companies, banks, hell even the government.
I deliberately flow a higher percentage of transactions through my, literally 10 min walk away, regional bank branch. I also occasionally (~once/month), literally walk into the lobby (shocking I know) to say "hi!" when withdrawing cash at the ATM for travel.
They know me by name & face. I'm not just a number to the tellers, the manager, and the vp, and likewise back to them.
Shockingly, I get fees waived for wires the occasional cashier's check, and am appraised of anything else going on with the website, upcoming services, and pending transactions (even at high relative holding percentages from one-time routes) flow through like butter.
Relationship banking at its finest.
Add in the co-op network of credit unions, where you can go to any branch of any of the member unions (50k+ branches last time I checked, but it's been awhile) and it's hard for me to understand why people bother with these big banks.
I will never do business with them again, even though their many branches (literally have one across the street from my office) would make it convenient.
> “since you have enough money in your account to pay this off I don’t know why you are using this plan at all. These are intended for low income customers”
and did nothing to solve the problem.
https://mitchellh.com/writing/my-startup-banking-story
(edited since at first I remembered it being more negative about chase in particular -- but it's really just funny!)
> I want to make it clear that Chase could've been an excellent banking partner. I never gave them the chance. I never told them what my business does or what I'd use the money for. I never talked to anyone (besides saying what I needed to get off the phone). This story isn't a cautionary tale about Chase, it is rather recounting my naivete as a young, first-time startup founder.
If a bank suspects fraud, they can tell other banks about their suspicion, which will cause all banks to freeze your accounts and none will be able to tell you why.
[1] https://www.nerdwallet.com/article/banking/blocked-by-chexsy...
https://en.wikipedia.org/wiki/Computer_says_no
https://www.youtube.com/watch?v=x0YGZPycMEU
For niche, zany sketch comedy, Little Britain is a gem.
I now only do my financial transactions with smallish credit unions. Big enough that they can have the services I need, but small enough that my business is a large-ish part of the Unions' business.
This works internationally, not just US or Europe. Most nations have some sort of a member-owned financial cooperatives, equivalent to credit unions.
Anyway, sibling knew someone who worked at JP Morgan private bank and they were willing to do all the work so I said "sure".
Turns out Chase and JP Morgan are integrated on the backend but not Private bank. So the transfer couldn't go through.All in all this was 15-20 emails and multiple phone calls.
And then I was told to open a Chase individual investment account instead.
Not wanting to continue to burn time during work hours when I was super busy with a project, I drove 20 minutes to a Chase branch to open an account with an investment banker to make sure all went smoothly (instead of doing it online).
He couldn't open the account for me, couldn't get anyone on the phone, either. Turns out that the backend is connected enough with Private Bank that I had a profile in their system, but he couldn't "do" anything with it.
A few more emails and phone calls and the Chase investment banker sent me a link to open an account online. So I do that and let the banker that controlled the original stock account know the account details. But he still couldn't transfer the stock. That private bank profile still causing problems I guess.
I was given an 800 number to call private bank to get them to close the account. I spent about a half hour on hold before I hung up. I then contacted the banker I knew at Private Bank and informed him, he said he'd take care of it. Later that day he emailed me and said he had put in the order and I would get a confirmation.
I did get the confirmation but was informed it would take a few days. Once that was done I contacted the broker that controlled the stock account. He tried again, no dice.
He then decided to get licensed in my state so that he could create the account for me. That took another week or so.
And, I was told to close the Chase account. I did that, again, a couple days. By this time I'm 20-25 hours in with phone calls, emails, conversations with my siblings, have driven into the city twice, and so on.
Finally, after about an hour on the phone the next week, the broker creates my account and is able to execute the transfer. Of course, by this time the stock market had tanked and the stock had lost ~20% of its value, meaning I netted less than my siblings, and spent a ton of time.
What. A. Circus.
You'd need to figure that out eventually anyway. Better sooner than later.
But in any case, you could have sold the stock, transferred the money, and then re-purchased the stock and simply reported it as a wash sale.
> by this time the stock market had tanked
That can go either way. I've had stocks that I wanted to sell get held up, and go up in value in the meantime. So you have to just chalk that up to fate.
100%
> That can go either way. I've had stocks that I wanted to sell get held up, and go up in value in the meantime. So you have to just chalk that up to fate.
My plan was to immediately sell 50% of the stock (it was at an all-time high) immediately but now plans have changed. Oh well.
The Fraud and Trust VP seemed shocked when I mentioned to her that it wasn't a big deal for me, and that I had my personal accounts with a credit union.
It's been 4+ years. I've written the money off.
This was brought to my awareness due to the recent news about how somebody could not sue Disney because they had opened a Disney+ streaming account.
We need financial reform customer protections. Let us hope the party that fights for big businesses and billionaires does not win in the next election.
Front line lawyers at megacorps will respond with anything and their argument about arbitration because of Disney+ (they also claimed arbitration because the plaintiff did in fact also buy a park ticket on their website) was withdrawn shortly after the media shitstorm.
Even then, if I was going to do it I would want to be sitting physically across from a bank officer to make it happen, not online. I opened business checking from BofA online years ago and it was a total nightmare even living a short walk from the branch, being a US citizen, etc. They did freeze it once or twice. Never again.
I’ve used chase and other big banks to nonissue outside Zelle crap.
So I’ll wait to see the same thing with mercury. But my experience with them sucked and whenever someone Hails they were their savior I will post my experience.
Mercury bank sucks, etc.
The real question is: why did it take months of having their vital money withheld before trying to go around the bottom rung support that was clearly not going to help? By like week 2 I’d be talking to an attorney and I bet a letter from them would get it cleared up fast. (Perhaps I’m wrong though.)
I figured I'd sort it all out by the time I moved. However, I may have been a little too relaxed about the situation and stressed out about other stuff
Is that on the shitty bank rules, or shitty software? After 2 hours and the bank stuff calling some helpdesk they managed to do it.
Not often you get to read a post from the future, either ;) "posted on 2024/09/21"
Then the financial collapse and bailouts happened, Chase scooped up WaMu, and now Chase is everywhere here. :sadpanda:
I won't even take money from their ATMs if I can avoid it, my bank covers ATM fees, but f*ck giving that company another dime.
The caveat is if there's a major problem, like here, then you'd need to deal directly with your home credit union.
I'd love to switch to a new bank. Any recommendations?
Always have multiple debit and credit cards between different institutions.
If possible avoid the USA banking system, although thats easier said than done if you live there.
These are good practices for both professional, company and personal finances.
There are a few other legal differences as well, but the ownership is the big difference.
Banks are for profit (and likely publicly traded).
Some people never learn, I guess?
Revolut, Mercury, Meow and Payoneer (Personally using myself) are all leading online businesses.
Sometimes, their built-in protection system flags unusual activity and takes action but that doesn't mean businesses using Payoneer should stop promoting Payoneer.
If you ever needed a reason for a decentralized finance, this is among the top reasons.
These stories can, and do, happen to anyone at any bank. And what can we do about it? It seems like the answer is a glib 'nothing'.
What are the solutions? Laws should be passed to protect customers' rights in the event of an account closure; banks should probably be provided some safe harbor so they aren't as skittish; and in the meantime, bank with a smaller credit union that have a smaller target on their back, and also if something breaks you can yell at someone who can actually fix it.
Should be: Chasing Chase: Why I'll Never Trust Chase Bank Again, A Yuppie Nightmare
Yeah no one tells you when you start your business that your own bank is preying on you.
Am I shilling for banks? I hope not. It just seems that at this point anyone who imagines the banks are going to work for you, the customer, has not been paying attention and/or is delusional.
Finding out that SolarFlower Bank in Hometown, Your State has provided exceptional banking services is massively more useful than hearing, once again that BigBankCorp are terrible.
Apparently banks can be tough to work with for obscure reasons.
Own little case:
While in NYS (US, New York State), did personal banking with, false name, XYZ Bank. Somehow I was assigned to a particular branch office of XYZ in NYS.
Moved to TN (Tennessee). Eventually ran out of paper checks, so ordered a new supply. The account was "joint" with my wife; thus, her name was also printed on the checks. Since my wife had been dead for 20+ years, I guessed (first mistake) that it would be more appropriate to have her name removed from the new batch of checks I was ordering.
Did get the new checks and used a few (mostly I don't pay with paper checks).
Then got some communications from "my" branch office of XYZ bank in NYS that I should come to the branch office and sign my name to show that I am the real owner or whatever of the account.
Apparently due to the new checks without my wife's name, someone at XYZ Bank was afraid that I was doing something nasty to my wife, to separate her from our joint money, etc.
Soooo, they wanted me to drive from TN to NYS for WHAT THE F????
So, I called and got sent to "my" XYZ Bank branch office in NYS.
On the phone to that office I explained:
"My wife died 20+ years ago. You are welcome to drive to Indiana, to the little town of Warsaw, take the main road south out of town, drive about 15 miles, turn left, east, to the little village of Claypool. There you will find a school and a church. The church has a graveyard. There you will find the tombstone of my wife ....
For my signature, you already have hundreds of copies of that. I will NOT drive to NYS. For more I will gladly talk to you. But I will not talk to lawyers. If you involve a lawyer, then I will immediately close out my account. If you want, I'll order a new batch of checks that again has my wife's name printed on the checks."
That worked. Otherwise I like XYZ Bank a lot. But, since XYZ Bank has no branch office near me in Tennessee, really I should get an account with a bank with an office where I live. Actually, while in NYS, I did open a "business" account at a branch of Chase. It was a small branch, small office, no Greek columns, just a few nice women, trying to be a local bank, for businesses, yes, but also for consumers. Likely gave them the form I'd just gotten from NYS "Doing business as". Checking, Chase does have a small branch where I live. And I have a small balance in that account.
Hmm. Sounds like anyone with a SMB (small, medium business) should have more bank accounts, not fewer!!! Sounds like, before my business starts getting revenue, I should get an account at a local bank where I can be known in person and use that as my main business bank.
Also lesson: Banks are legalistic, have too many rules, have low common sense, like lawyers too much, can be simplistic close to brain-dead, tend to be paranoid, and can generate expensive legal problems. Go slow on crypto, more than the necessary one LLC (limited liability company), etc.
Addendum:
For this discussion about banking, we all should understand at least a little about financial institutions
SMB -- Small Medium Business
KYC -- Know Your Customer
SAR -- Suspicious Activity Reports
BSA -- Bank Secrecy Act
So glad I was able to just walk in to the local HQ and have a sit-down with the person who ultimately authorized crypto exchange transactions. YMMV
For example, USDC accounts can be frozen by a single entity with no recourse whatsoever.
Not really. It just replaces this problem with a different but equally difficult problem: managing your crypto keys, which is a skill in and of itself. And if you hire someone to do it for you now you are right back where you started, trusting a third party.
The right answer IMHO is to do business with a bank that is small enough that you have a contact there whom you personally know and will pick up the phone when you call.
Um, depending on how complicated/paranoid you want to get?
Install the Phoenix wallet app and you've got your keys and Lightning node ready to go, pending added liquidity. Sure, it's not maximally secure, but a person can perform transactions outside the banking system pretty easily this way. No need to so consciously "manage" anything.
Phone not secure enough? Fine – then get a hardware wallet like Ledger.
But maybe I'm misunderstanding your point?
> And if you hire someone to do it for you now you are right back where you started, trusting a third party.
If, by hiring someone, you mean using a custodian like Kraken, then you're still solving a problem by not dealing with the traditional banking system. Sure, you're back to trusting a third party, but that's really not the issue at hand, but avoiding Big Bank.
> The right answer IMHO is to do business with a bank that is small enough that you have a contact there whom you personally know and will pick up the phone when you call.
Seems like a nice idea, yet very optimistic. Is everyone supposed to have a personal contact from within a small bank? Probably works for some people, but involves luck and wouldn't scale. The issue isn't really being solved this way.
The closest compromise might be to work with credit unions instead of banks.
Would I use it as a primary cash account for my business today? No, because of the obvious exchange rate/price swings. But long-term, moving toward Bitcoin as a settlement layer (i.e., a modern SWIFT) would solve a ton of problems and avoid situations like this. The more people that do that/normalize it, the more stable the price in other currencies, too.
I get that people like to hate on it because it's not a perfect solution to everything, but in a hostile unpredictable environment, it's a life saver.
- Receive money from customers. If the customers don't have Bitcoin, they're not going to pay you in Bitcoin.
- Pay your employees and suppliers. Very few of them will accept Bitcoin.
- Borrow money to cover differences between revenue and expenses. The entity loaning you the money may or may loan you Bitcoin, but what difference does it make? They're going to give you the same scrutiny and terms as any other lender in any currency.
- Security for your enormous wads of liquid assets. Banks have vaults and FDIC insurance. Bitcoin has nothing on its own, and if you use an exchange, they can do exactly what a bank does and freeze your funds, or in many cases, just steal it and spend it themselves.
You say later you just mean "well, you can withdraw some of your country's legal tender from the bank and store it as Bitcoin in case you need it later." You can just diversify the same way everyone else suggests by using multiple banks. If you trust zero banks, you can withdraw cash and stuff it under your mattress. You can loan it to a local drug lord. You can buy gold. You can buy forex and put it in a foreign bank. I guess some of these options are less liquid than others, but what advantage are you really claiming keeping your rainy day fund as Bitcoin has over anything else? Generally speaking, businesses tend to stick with things like commercial paper and treasuries and that has seemingly worked out fine.
I wish we had real verifiable base rates on the probability that a business will go under because it's cash and near cash equivalents line item was seized by authorities even though they legitimately did nothing wrong versus a business will go under because it decided to keep all of its funds in cryptocurrency and it either tanked overnight, they lost the key, SBF took their money because he felt like it, or whatever other reasons might happen.
Would you seriously bet the former is more likely than the latter?
In the current epoch, I'd cite Murphy's Law and say that anything is possible and it's wise for a CEO/CFO to plan ahead in case this happens. Bitcoin is one among several options and an excellent safeguard against corruption, political persecution, etc.
As for exchange hacks and lost keys, the business that relies on this will intelligently keep funds off-exchange/self-custody and use multisig wallets with signatures held by multiple officers of the company.
Today, it's the "nuclear option." But if enough people start transacting in Bitcoin routinely, it's the ideal future.
Tell us you don't comprehend cryptocurrency without telling us you don't...
Every customer my firm has offered a 15% discount if paying with BTC via Coinbase has taken it.
Long-term, if everyone does larger transactions in Bitcoin (e.g., payroll, invoice payments, etc), then problems like this never occur.
I’ve been following the Evolve Bank fallout on the FinTech Weekly newsletter, and the whole situation scares me about Mercury. I used to bank with them, but the sanctions by the Federal Reserve and the continued disclosures about lacking KYC and money laundering controls has me worried there are other problems.