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That really is awful, and I'm sorry that happened to you.

I also moved to hoard a few types of liquid assets, and also have accounts with three banks (and multiple cards) to reduce the risk of a single-bank causing this level of impact to me.

Of course, trying to work around regulation like that, is probably against some other regulation.

Not really, but the government may freeze all accounts of a person in all banks in the world.

I was thinking of something like https://en.wikipedia.org/wiki/Structuring

I see, but what I know is that it's allowed to use multiple banks for the purpose of increasing the amount of money under FDIC insurance (which is more like $100k/bank, not $10k/bank).

There are services that split your money between multiple banks just for this reason.

FDIC deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category.

https://www.fdic.gov/deposit/covered/categories.html

In the U.S. yes, I'm from the EU though where there's a similar insurance (EDIS) which has a 100k EUR limit.

> Long story short: 2 weeks later my account is unfrozen for no reason. I was never given a reason.

it is illegal for the bank to inform you of any AML investigation undertaken whether internally or the FBI or fincen or any of the other federal bodies. if you don't like the way this is done, i suggest you take it up to your congressmen.

Or buy Bitcoin.

That seems like absence of explanation is an explanation in and of itself.

If the bank can give you a straight answer, it's clearly not AML. If they start giving you no answer, it's presumably that. Id' expect if you were seriously in that game, that's one of the clear signs something's awry and you'd better start activating panic measures.

I'm also sort of confused about the concept of freezing accounts during an investigation. If it was late stage and they were saying "okay, shut it down, we'll be sending over the cops with the arrest warrant within an hour", that's one thing, but any sudden movement on accounts is likely to change the behaviour you're trying to monitor and document. The darkweb market seizures seemed smarter in that regard-- they let some of them run with no obvious changes so they could gather data, only taking it down once the case was completely built.

I don’t even know what agency in the government did this. Or that I was part of an investigation. Or anything. Different people at different positions in the bank would say the same thing “the computer says your account is flagged” “the system says your social security number is flagged” etc. When I would ask what “flagged” means they would just repeat nonsensical shit. All they would really tell me is that they had no control because a government system had flagged it.

Which is why some (e.g. Bitfinex) use warrant canaries [1]. I would love if we have a warrant canary button tied to all our accounts of any kind (banking, social media, netflix subscriptions etc.)

[1] https://en.wikipedia.org/wiki/Warrant_canary

The article you linked explains why warrant canaries aren't trustworthy.

> you don't like the way this is done, i suggest you take it up to your congressmen.

I wish they would listen. Everyone in congress right now supports an unconstrained federal government that does things like freeze your bank account without any reason or due process. Both parties are hellbent on expanding their power at the expense of liberty in the name of safety or security.

I think US politicians' failure to act effectively in the interests of US citizens is caused more by the concentration of political power than it is by bad people. The US isn't alone among developed countries in having this problem, but there are plenty of developed countries that manage to avoid it. The answer is more democratic accountability, in the form of measures such as proportional representation.

This Jennifer Lawrence video summarises some desirable reforms: https://www.youtube.com/watch?v=TfQij4aQq1k

See also Lawrence Lessig's "Our democracy no longer represents the people. Here's how we fix it": https://www.youtube.com/watch?v=PJy8vTu66tE

> it is illegal for the bank to inform you of any AML investigation

Is this an actual law that was voted by congress, or just some regulation that the FBI pulled out of their ear one bright Monday morning ?

> i suggest you take it up to your congressmen.

That'd assume the answer to my first question is yes. Citation needed.

I think there's a third possibly: namely that Congress has somehow allowed the FBI to make such rules, but could reclaim control in the future.

As I understand it, a lot of things work like this in some unitary (as opposed to federal), parliamentary (as opposed to presidential) democracies. In at least some such countries all governmental power ultimately depends on the elected legislature, but it can be delegated to other bodies (including to the executive and to local government) as the legislature chooses. The legislature can reclaim its power, too, even from directly-elected local authorities.

Why on earth were you keeping $30,000 in the account you use to pay for groceries?

Where else would I keep it? In the stock market where it can disappear overnight?

Where do you keep your savings?

I would suggest researching how to invest your savings, otherwise it's being eaten away by inflation, and there is no savings account that has enough interest to match that rate currently.

It's harsh to say it, but that statement is a demonstration of your ignorance.

Thanks for providing insults rather than enlightenment.

I see this a lot online, but this is not good advice. Savings are meant to provide liquidity in an emergency. If you have $20,000 in a savings account, you can walk to an ATM and withdraw some of that immediately. If you have $20,000 locked up in mutual funds, well... you’d better hope your rainy day has some lead time.

Investing is great. Put $10,000 in something diverse and passive and sit on it. But also keep a savings account for immediate emergencies, and keep some cash on hand for even more immediate emergencies.

Yes, that is called an emergency fund. I didn't want to go into a big explainer of how a typical pre-tax & post-tax index fund savings brokerage works + cash emergency fund in savings works to a random on the internet while there are many other better resources out there.

What emergency requires $20K in less than a week? A kidnapping?

The number was illustrative. If it helps, feel free to imagine a different one.

I can wire money out of my Vanguard (mutual funds) account before 4 PM today and it will be in receiving bank tomorrow mid-day.

I can withdraw money from my ETrade or IB margin accounts using the debit card that came with those accounts (or write a check on them), same as you can with a savings account.

I do keep a few thousand at a local bank and have a separate checking account at USAA that I use for most daily/monthly transactions, but that's for convenience not access/liquidity reasons.

Losing 2-3% per year is better than losing 10/20/30 % or god forbid >50% of your savings - which you cannot recoup.

It depends on what they are saving for - if they need the 20-30K a year down the line it is alright to keep it in the savings account.

If it is for general long term asset building - may be they haven't yet figured out how best to start investing. Again no harm to keep it parked till you figure it out instead of investing in haste and then regret later - for the rest of your life.

Yup. You’ve got it right. I am far more interested in preserving capital than chasing returns at this point. So keeping it parked while using it to capitalize cash flow from businesses and real estate is more to my liking than making one giant bet on an index fund over 30-40 years. Don’t get me wrong I’m not knocking index funds they have their place.

May be you can start with small steps to test the waters. Amount that you are ok to lose in an extreme event. Which might cause you some inconvenience but not great distress. Perhaps 5-10% of your savings in equities. Watch how you repond to the market swings (both up and down) and factor that in for your future investments.

I know people who have been sitting on the sidelines afraid to invest in what must be the tail end of the longest bull market we've ever seen.

One in particular has been sitting on the sidelines since before the 2016 election season. They have foregone about a 50% gain that they'd have gotten over that period. That money also can never be recouped.

https://awealthofcommonsense.com/2014/02/worlds-worst-market...

It’s not a gain unless it’s realized.

If one owns a stock and the price goes up 10% they don’t make any money. They would have to sell to make money.

At some point “Bob” needs to retire, hopefully that’s not during a downturn.

This kind of thinking is creating a dangerous bubble at this time

Though I am not there yet, the Permanent Portfolio [1] makes sense to me. The key insight is that for the money you have lost, you can never recover the energy/time/life you have spent in earning it. So, capital preservation (wrt inflation) is more important than chasing higher returns - which frankly are not under your control.

[1] https://www.amazon.com/Permanent-Portfolio-Long-Term-Investm...

This is the loss aversion fallacy. (The irrational belief that losing something you already have is worse than losing a chance to getting something you don't have yet.)

You can never recover the time you spent earning money to make up for missing investment gains.

This is not a fallacy, and certainly not an irrational belief :). It is a very rational response to things you have no control over.

May be this needs some elaboration. For me, the low probability event of blowing up your life's worth of saving beats the ephemeral gains you would expect to get from a higher risk investments, every single time. For me, it is irrational to think otherwise, something I can't understand why people do. I will invest in the riskier investments only so much as I am comfortable to lose completely.

And there is the rub, with the modern banking systems, it is very difficult to achieve that unless you use real hard assets like gold which is becoming difficult, real estate which is quite illiquid.

Is one missing out on potential gains ? Perhaps, but one is ok with that.

P.S >> You can never recover the time you spent earning money to make up for missing investment gains.

I didn't quite understand this. The investment gains are not certain or guaranteed. You talk as if they are a certainty.

You could also take a look at portfoliocharts.com, which shows you how that and other portfolios have worked out over the past 50 years, in both the US and Japan. You can play around with your own variations too.

The PP does pretty well at limiting drawdowns. A variation that works especially well is the "Golden Butterfly," which just takes the PP and weights a little more towards stocks. In my own experiments on the site, I've found it also helps a lot to include international stocks, and weight towards small value.

CD, T-bills, bonds?

Also, the stock market doesn't disappear overnight.

In a savings account.That way if the checking account gets compromised, the majority of your money are safe. A common way for a checking account to be compromised is for someone to steal the debit card associated with it. That way is has access to most of your money. There are withdraw limits that kind of limit the impact of such scenario, but you can still loose plenty of money. Also, money associated with a debit card are your own money, so if you loose them the bank can not do many things, in contrast to credit cards, where they can cancel transactions.

The main idea is to keep separate accounts for "everyday life" and savings.

I am sorry this happened to you. In future, at the minimum, you should have 3 accounts.

* In bank 1, a current account, for everyday use. This should not have more money than 1-2 months of expenses.

* In bank 1, a savings account, which is your primary savings.

* In bank 2, a savings account, which has enough money for a few months of rent.

* Stash somewhere in your house, in cash, enough money for a week of outside food and transport to family/friends who can take you in, in case of you losing your primary accommodation.

This all depends on you being rich enough to afford all of this, but I imagine 30K in the bank account is rich enough. Also, as others have pointed out, you should consider investing.

> In future, at the minimum, you should have 3 accounts.

Or have no account at all and pay cash. Which is not very convenient with physical money. But becomes fairly workable with something like Bitcoin.

We make a point to have backup accounts with some small but non-trivial amount of money in them for cases like this. Normally when we run into it is if our debit card for our main bank gets compromised.

This sounds like it was an anti-money-laundering law-enforcement action, in which case all of your accounts would have been frozen.

Good to know... very interesting.

This is a good post. Why is it grayed out?

Nobody knows. HN has downvotes for a secret group of users. HN weights votes using a secret algorithm, so some users may have the ability to grey out posts with a single click.

Now your post is grayed out.

Someone is watching...

I was tempted to downvote both of you just to cause untargeted suspicion :P

All you need is a certain amount of karma - which you currently don't have. There is no other criteria.

https://news.ycombinator.com/newsfaq.html

The money equivalent of when the super smart AI spam filter sends email from your business clients to /dev/null ?

This is pretty poor behavior from the bank. But for it to be a form of control, their actions must lead to you doing something what they want. And I don’t see that here.

Did you own crypto before this happened? If not, I can't even imagine how you got on the government's radar.

Probably bank incompetence.

It's an outrageous story, and I'm sure it was bank incompetence, but what triggered it? Law enforcement wouldn't order their account frozen for no reason -- it was probably a stupid reason, but still there's some reason.