Credit cards close accounts like this all the time. But I find it extremely unlikely they will dip into your US FF account and deduct 40k miles they gave you because they closed the account. More likely the person on the phone was talking about miles accumulated but not transferred to US yet. And once you use those miles to ticket an award reservation, there is no way on earth Barclays or anybody would cancel that ticket and remove the miles. Only US would do that, and only if they uncovered some sort of fraud or abuse of miles.