Revolut Account Closed Due to Russian Sanctions: How to Challenge the Decision
If your Revolut account has been closed because of a transaction linked to Russia — even where the funds come from a non-sanctioned source — you are not alone, and the decision is not necessarily final.
We are pleased to confirm that, following Daniel Stepanov’s detailed submission to the Office of Financial Sanctions Implementation (OFSI), no breach of UK financial sanctions was identified in connection with a property sale transaction involving Sberbank as an intermediary. Notwithstanding this outcome, Revolut had taken the precautionary step of closing the client’s account — a position that is now being challenged, with recovery of funds and reinstatement of the account actively pursued.
This case offers a rare and practical reference point for anyone facing similar action by a UK financial institution.
The Background
The frozen transaction in question involved funds originating from a non-sanctioned Russian bank, which were subsequently converted into cryptocurrency by our client and transferred to his UK Revolut account.
OFSI’s Position
Following a detailed submission prepared and lodged on the client’s behalf, OFSI confirmed that no breach of UK financial sanctions was identified in connection with the transaction.
This outcome is significant. It demonstrates that transactions undertaken by non-sanctioned Russian individuals — particularly those seeking to move legitimately obtained funds from Russia to the United Kingdom, where they are resident — can, in appropriate circumstances, fall outside the scope of UK financial sanctions, provided that all applicable compliance requirements are satisfied.
In other words: the involvement of a Russian intermediary bank, or the use of cryptocurrency in the settlement chain, does not automatically render a transaction unlawful under the UK sanctions regime.
Why Revolut Still Closed the Account
Despite OFSI’s position, Revolut exercised its commercial discretion to terminate the customer relationship. This is a pattern we increasingly see across UK financial institutions: a risk-averse, sometimes over-inclusive reading of sanctions exposure that treats any Russian touchpoint as a reason to de-bank the customer — even where the regulator itself has found no contravention.
This reflects a broader tension. Banks and e-money institutions are under significant supervisory pressure to avoid facilitating sanctions breaches. In practice, that pressure often translates into:
- automatic account freezes on detection of any Russia-linked counterparty
- account closures issued with limited explanation
- reluctance to reconsider the position even when compliance documentation is provided
- no meaningful distinction between sanctioned and non-sanctioned Russian persons
The result is disruption for customers whose transactions are entirely lawful.
Challenging Revolut’s Decision
Revolut’s closure of the account is now being formally challenged, with two objectives: recovery of the held funds and reinstatement of the account. A clear OFSI position confirming no breach materially strengthens the basis for that challenge.
The strength of any challenge depends heavily on the quality of evidence: source of funds documentation, counterparty due diligence, the regulatory position of intermediary banks, and — where available — a formal OFSI view.
Key Takeaway: Sanctions Compliance Is Not a Tick-Box Exercise
Misinterpretation of sanctions risk by a financial institution can lead to unjustified account closures, disrupted legitimate transactions, and significant commercial impact on individuals and businesses alike. The position taken by a bank or e-money firm is not the final word. Where the underlying transaction is lawful, it can often be demonstrated to be so — and the institution’s decision can be challenged on that basis.
What Effective Handling of These Matters Requires
In practice, sanctions-related account and transaction issues call for:
- careful navigation of the UK sanctions regime, including the Russia (Sanctions) (EU Exit) Regulations 2019 and subsequent amendments
- direct, early engagement with regulators, including OFSI — ideally in advance of the transaction rather than after the fact
- strategic handling of financial institutions’ internal compliance decisions, including engagement with their legal and MLRO teams
- robust submissions supported by documentary evidence and the applicable regulatory context
Appropriate legal and compliance advice should be sought at an early stage in any comparable transaction. Careful assessment of counterparties, source of funds, and transaction structure remains essential to mitigate regulatory and enforcement risk.
Experience in this area allows matters to be reframed effectively, from presumed risk to demonstrated compliance.
If you are dealing with blocked funds, account closures, or sanctions-related concerns, it is often possible to challenge the position taken and seek a practical resolution. Daniel Stepanov at Sterling Law can be contacted at daniel@sterling-law.co.uk
