Well if that's in their T's and C's that's fine, to a point, but they can't just silently close an account and take money from people. They need to return the money - it's not their job to play police and judge and seize illicit gains, a court has to decide whether it IS illicit and what happens to it first - and to give an explanation as to why they no longer want to do business with them.
I mean not wanting to do business is every business and person's right. But taking someone else's money without a court order or mandate is theft.
You should look into OFAC. They'll freeze your account for withdrawals, but not deposits, and no one is allowed to tell you it was an OFAC hit.
Make no mistake, financial service in the United States is heavily tilted against the consumer, and your service provider should be considered an actively hostile entity.
I mean not wanting to do business is every business and person's right. But taking someone else's money without a court order or mandate is theft.