I assume banks are quite interested in who transfers money to who. Monero obviously isn’t illegal, but feds don’t like it very much. So in the cases of:
- My bank finding out that people I’ve transacted with sell monero
- Users I trade with caught doing something illegal
- Bank inferring that I’ve been buying crypto peer to peer from some analysis of my transaction patterns
Different banks treat crypto differently so without knowing your bank nobody can tell how they’ll react to finding out you’re trading crypto. Some banks have no problem with it at all. Others don’t like it.
If your bank is anti-crypto and they suspect you of trading crypto they will usually freeze your account while they find out what you’re doing. This usually happens without notice and it’s a long and tedious task getting it unfrozen. You’re at the whim of the bank and in some cases they will permanently close your account.
In regards to volume of transactions. Many banks will take issue with large volumes. I’ve had issues with 2 different banks who were of the opinion that large amounts of transactions look suspicious. Again they are likely to freeze your accounts in this situation too. Always “for your own protection and security” of course.
I recommend setting up a business account to trade. That’s what I have done and so far (fingers crossed) I’ve had no issues.
All being said, there is nothing wrong with buying and selling crypto. Banks and governments don’t like it because they are threatened by it. If you have problems with your bank for trading crypto I would certainly find a new bank. If a bank gives you trouble and refuses you access to your own money then they don’t deserve your custom anyway.
You’re not doing anything illegal by buying crypto. You can’t control what the vendor does after he receives the money.
I’ve traded crypto for several years P2P and I’ve never had a bank closed or analyzed from Paypal deposits. That being said, I have had accounts closed from sending money directly to crypto exchanges like coinbase.
If you have a job and the bank can account for the money coming in they don’t really care. It’s your money.
And just to answer your question. Hypothetically if a bank decided it didn’t like you making Paypal deposits they would simply close your account and mail you a check for the balance. Unless you’re dealing with $1000’s per deposit on a frequent basis I just don’t see it happening though