Is it legal for banks to block or limit transfers to cryptocurrency exchanges?

Banks by law have to provide banking services to you. They cannot unilaterally shut you out. There has to be a basis. They need a reason. In the United States, most of the banks de-risk themselves of crypto-based business using the Operation Choke Point as the basis of not taking your business. Reason cited? A crypto-related business is a money services business and hence represents unlicensed and/or undocumented money transfer. On this basis, the bank will not provide banking services to you. (See: Operation Choke Point - Wikipedia).

Elsewhere, banks are using similar tactics and/or reasoning that the business is high-risk and in the absence of regulatory clarity and licensing, they will not entertain such a business.

In addition, bank are not obligated to give you the exact reasoning of the decline of services. They can just cite the words “high-risk” as tagged by their compliance department and they will not do business with you.

The very business the crypto industry wishes to put in a coffin and 6-feet under is the industry that decides it will not play with you. Ironic in so many ways.