I've worked in a bank, and we did freeze accounts on money laundering suspicions - it's not even a choice, the law requires to do so in certain conditions.
And the OP case description is quite unclear, but the details sound like that it might be not "assets frozen while check if business is legit", but actually a threat of "charges filed against owner for circumventing anti-money laundering laws and assets confiscated".
And the OP case description is quite unclear, but the details sound like that it might be not "assets frozen while check if business is legit", but actually a threat of "charges filed against owner for circumventing anti-money laundering laws and assets confiscated".