Schwab doesn't like OTC stocks either, they refused to take 15000 shares I had as part an account I transferred to them unless I filled out a form detailing each lot with the date and cost basis. This was a somewhat draconian requirement since I'd been acquiring the stock off and on since mid 2020 in that other account. They are OK with the shares I acquired through them, which is a much larger position.

To make it still crazier, the other firm (Etrade) wouldn't take the shares back unless the whole account came back, which left those shares marooned over at Computershare, which is a sort of electronic clearinghouse for equities.

As far as your firm goes, their policy seems even worse, sounds punitive to me.
Try and see if it applies to OTC stocks in general rather than just CYDY. Good luck.