Why Banks Reject Crypto Businesses (And How to Fix It) #
Your Wyoming LLC is formed. Your business plan is solid. You apply for a bank account and get rejected. Then rejected again. The bank won’t even tell you why, just that they “can’t move forward at this time.”
Banks refuse crypto businesses for three reasons. First, compliance risk. Federal regulators have made it clear they’re watching crypto closely, and banks know they’ll face audits and penalties if anything looks off. Second, revenue flow that compliance teams can’t easily track. Money comes from exchanges, goes to wallets, moves between chains. Traditional banking software flags that as suspicious. Third, all the scammers and fraud operations that came before you. Banks got burned by bad actors and now they’re gun-shy about the whole sector.
None of this means your legitimate business can’t get banking. It means you need to speak their language and structure your application so compliance departments see a normal company, not a regulatory headache waiting to happen.
The NAICS code you choose matters more than most people realize. This is the six-digit classification code that tells banks what industry you’re in. If you put down 523999 for “Miscellaneous Financial Investment Activities” or anything with “cryptocurrency trading” in the description, you’re triggering every compliance red flag the bank has.
Use NAICS 551112 (Offices of Other Holding Companies) or 551114 (Corporate, Subsidiary, and Regional Managing Offices) instead. You’re not lying. Your LLC holds and manages digital assets. That’s what holding companies do. The code describes your actual business function without screaming “crypto” at the compliance team scanning applications.
This isn’t about hiding what you do. You’ll still disclose your actual business activities in the application. But the NAICS code determines which risk category the bank slots you into before a human even reads your application. Get categorized wrong and you’re rejected by algorithm before anyone looks at your docs.
Mercury understands this game. They’ve onboarded thousands of crypto businesses and their compliance team knows the difference between legitimate operations and sketchy schemes. Relay works similarly, with multiple account features that help you separate business functions cleanly. Axos has been in the space longer and can handle higher volumes without panicking.
All three will still ask detailed questions. Where does your revenue come from? How much volume do you expect? What’s your customer base? Answer clearly and specifically. “We manage a portfolio of digital assets for long-term appreciation” is better than “we trade crypto.” Same activity, different framing, and framing matters to risk assessment algorithms.
Your application package needs to tell a coherent story. The LLC formation docs, the operating agreement, the business purpose statement, and the NAICS code all need to align. If your operating agreement says you’re trading cryptocurrency but your NAICS code says you’re a holding company, that inconsistency gets you denied.
Getting professional help with this structure prevents denials and saves time. Teams that specialize in crypto banking prep your documents so everything lines up correctly the first time.
Remember that banking and custody are separate issues. Your bank account handles fiat currency. Your actual digital assets should never sit on an exchange or in a hot wallet connected to the internet. Hardware custody solutions like D’Cent keep your crypto under your control with proper security.
Once you have clean banking established, you can focus on actually managing the wealth you’re building. That’s where registered investment advisors become relevant. RIAs work under fiduciary duty, meaning they’re legally required to put your interests first. Digital Wealth Partners provides wealth management, investment advisory, and financial planning at that fiduciary level, understanding how digital assets fit into a broader portfolio strategy.
When your financial situation gets complex enough that you’re managing multiple entities, planning estate transfers, and coordinating tax strategy across different asset classes, you’ve moved past standard wealth management into family office territory. Digital Ascension Group handles multi-generational planning, estate coordination, tax strategy oversight, and the kind of comprehensive financial coordination that high-net-worth individuals need when their wealth requires professional orchestration.
Contact Digital Ascension Group to learn how our family office services can coordinate your complete financial picture.
