Apple Cash Permanently Banned

Your second sentence tells you exactly why your account is permanently locked. It is a violation of the Terms & Conditions to use Apple Cash for commercial purposes. You’ve committed fraud and the bank no longer wants you as a customer.

https://applecash.greendot.com/termsconditions/

You are in the process of being de-banked. Known within the banking industry as de-risking, is the closure of people's or organizations' bank accounts by banks that perceive the account holders to pose a financial, legal, regulatory, or reputational risk to the bank.

Absolutely, the bank can lock your account. The return of the funds depends on the outcome of their investigation. Worst case is the bank returns them to your state’s unclaimed funds account in 6 months to 2 years and you can claim them at that time.

Contact Green Dot Bank:

• by calling (877) 233-8552,
• by mail for disputes at P.O. Box 9, West Chester, Ohio,
• by mail for general customer service at P.O. Box 1070, West Chester, Ohio 45071,
• visit www.greendot.com.

Call green dot bank and request the account be closed, and the funds issued to you by check, they can legally lock the account for whatever policy they decide, they can't keep your money, that's illegal

It's not an Apple issue. You have done something to violate policy of Green Dot bank, or general banking regulations. Green Dot can indeed lock you out and need not provide any reason for doing so.

Zelle is owned by 6 of the 10 largest banks in the US, Chase, BoA, Capital One, US Bank Truist, PNC and Wells Fargo. CFPB says about $900 million was lost by Zelle to fraud. TD Bank got a ~$3 billion fine for money laundering, which is the risk these banks face.

Yes, they can hold funds. The OP may have committed fraud.

Jeff Donald wrote:

Yes, they can hold funds. The OP may have committed fraud.

And I am seeing more articles about banks clamping down on Zelle and Venmo users for the same reasons.