UK Digital Bank Kroo to Prohibit Crypto Transactions from May 30
London-based challenger bank Kroo has made the decision to prohibit its customers from engaging in cryptocurrency transactions in order to ensure the security of user accounts and funds. The bank’s updated terms and conditions state that from May 30, 2024, they will no longer process bank transfers or card payments related to and from crypto asset providers. Kroo also announced that they will freeze or restrict accounts that are used for purchasing or trading in cryptocurrencies, and they may even block accounts that receive credits from crypto trading or transactions. The bank has warned that if they detect such activity, they will not process the payments and may close the account of customers who persistently engage in crypto transactions.
This move comes at a time when there has been a significant increase in online scams and frauds related to cryptocurrencies. Lloyds Bank in the UK recently issued an urgent warning about the rising number of crypto scams, which increased by 23% last year and primarily targeted younger investors. According to the warning, victims of crypto scams have lost an average of £10,741, which is higher than any other type of scam.
Kroo Bank is not the only UK-based challenger bank that has implemented a ban on crypto-related transactions. Starling Bank and Chase UK have also prohibited such transactions. Starling Bank issued a ban on crypto transfers in 2022, citing the high risk associated with crypto activity. Last October, Chase UK, JPMorgan’s British retail bank, restricted customers’ access to cryptocurrencies due to concerns about their illicit use.
NatWest Bank in the UK has taken a similar approach by setting limitations on crypto spending for its customers. They have specified that customers can only make up to £1000 worth of crypto payments per day and £5000 in a 30-day period.
Some may argue that Kroo’s decision is too harsh on the crypto community. In addition to concerns about fraud, regulatory struggles may have also influenced the ban. The UK’s Financial Conduct Authority’s marketing transparency regulations have recently raised questions about the trustworthiness of cryptocurrencies. David Janczewski, CEO of CoinCover, a blockchain protection company, suggested that instead of implementing a complete ban on crypto-related activity, it would be more effective to introduce stronger safety measures to prevent theft and loss.
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