Nationwide limits crypto exchange payments as consumer risk fears grow

A number of UK banks have restricted their prospects from shopping for crypto belongings as concern grows concerning the dangers posed by digital foreign money to prospects.

In an electronic mail to prospects earlier this week, Nationwide mentioned it will not permit funds to crypto exchanges utilizing its bank cards and would impose a £5,000 each day restrict on present account crypto spending.

The constructing society cited issues from the Monetary Conduct Authority (FCA) over attainable dangers to customers.
A Nationwide spokesperson mentioned: “To assist shield our members from cryptocurrency scams, the Society has launched a each day restrict on debit card funds to crypto belongings of £5,000 per day.”

“Members may also be prevented from utilizing a Nationwide bank card to buy crypto belongings.”

HSBC additionally launched restrictions on the acquisition of crypto currencies, with buyer prevented from buying cryptocurrencies utilizing an HSBC bank card from February.

HSBC mentioned this was due to the attainable danger to prospects citing the FCA’s issues that cryptocurrencies are high-risk speculative belongings.

Charles Kerrigan, a crypto and digital belongings associate with regulation agency CMS steered that banks are taking a extra cautious strategy to crypto as the brand new shopper responsibility will put extra strain on banks to guard their prospects.

“The regulators begin and end with shopper hurt on any query the place retail buyers are involved. The banks are making ready for the brand new shopper responsibility guidelines which put them on the hook for purchasers’ dangerous decisions,” he mentioned.

The strikes come after Santander launched limits on the quantities prospects may switch to crypto exchanges in November final yr, whereas NatWest launched restrictions in 2021.

Lloyds blocked crypto transactions through its bank cards in 2018.

A NatWest spokesperson mentioned “We undertake a danger primarily based strategy to how we profile crypto exchanges. Which means that we might limit funds to particular exchanges primarily based on the extent of danger that we predict that they pose.

“We don’t disclose all of the controls we’ve got in place to make sure we will proceed to guard prospects from the evolving threats posed by criminals.”

The FCA has beforehand estimated that round 85 per cent of crypto corporations failed to fulfill minimal regulatory necessities when making use of for registration.

The UK authorities is imposing laws on the crypto trade in an try to “embrace technological change” whereas defending customers from the chance.

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