Can anyone explain the N26 case to me?

I've tried to read two articles on it and they don't make sense.

It seems they stored data on users who closed their account to prevent money laundering, which is apparently fine if the bank actually blocks operation of those accounts according to one article.

But somehow this was not the case for those old accounts that were closed? How can you close an account but it's still an operational account? Like, was it still possible to send money to it etc.?

My guess is that the article is wrong and this was simply about them preventing legitimate users to close and then reopen a new account.

I have a hard time believing they were not allowed to keep that data for some time after acccount closing. It seems to be more about how it was used.