Ex PayPal CFO Roelof Botha tweeted on Nov.18 that Bank of America had unprecedentedly frozen his account without any warnings and explanation. He uploaded a picture of the letter he had received from the bank, which clearly stated:
“After a careful review of your banking relationship, we’ve made the decision to close your account above. As a reminder, your Deposit Account Agreement, which you received when you opened your account, allows either you or us to close your account at any time. This decision is final and won’t be reconsidered. We’re notifying you in advance to give you the opportunity to make banking arrangements at other financial institutions.”
The move came as a shock because Botha said that he had been a customer of the bank for over 20 years. He is currently a partner at Sequoia and overseeing several big companies such as Evernote, Mahalo, Square, Tumblr, Unity, and Whisper, and was previously on the board of YouTube. He has been ranked 18 on the Forbes Midas List, which is a ranking for business people in technology and life science venture capital. A customer of his level would probably have huge stores of money placed in his account, and therefore, one would not expect much to happen to him.
While the news of Botha’s account closure was circulating, Justin Sun, founder and CEO of Tron Foundation, retweeted Botha’s tweet and revealed how the bank had done the same to him, despite him being their customer for eight years. The bank is one of the oldest Banks in the United States, and currently, the 8th largest in the world, one would not expect such irresponsible behavior from them. This creates fear among other customers who have trusted the bank with a lot of their hard-earned money.
Entrepreneur and Civic CEO Vinny Lingham commented on Botha’s tweet, asking if he owns any Bitcoin as if the bank was punishing him for that.
However, Botha’s criticism against the bank has been seen as irony because PayPal itself has been known for closing its customer’s accounts and freezing their funds. As one customer retweeted Botha’s tweet and said, “this is exactly what your company PayPal did to me after 10 years. With absolutely no explanation… #Bitcoin.” Another customer also took advantage of the situation and expressed his claim that PayPal had done the same to him, for no reason, and kept $5,000 for six months without giving any explanation. PayPal also halted servicing the adult industry website, Pornhub, due to which thousands of its employees and models were unable to access their earnings.
This shows how centralized banks can immediately abandon their loyal customers without any explanation, something blockchain-based cryptocurrencies can never do. A lot of people tweeted, claiming that it is time to move towards cryptocurrencies that will be much safer than these centralized banks. Many Bitcoin experts and traders expect Bitcoin’s demand to grow after this incident. Among others, Venture capitalist Adam Draper advised Botha in a tweet to buy the cryptocurrency, and soon, the topic became top trending. Popular Twitter trader Rhythm tweeted, saying as if the bank was deliberately promoting Bitcoin.