- UK bank Kroo has imposed a ban on cryptocurrency transactions, effective May 30, 2024.
- This decision follows similar actions by other UK banks, such as Starling Bank and Chase UK.
- Data from Action Fraud indicates that crypto fraud in the UK surged by 41% last year, reaching £306 million.
UK bank Kroo bans crypto transactions, effective May 30, 2024, citing increased fraud risks and aligning with other major UK banks.
Kroo’s Ban on Cryptocurrency Transactions
London-based digital bank Kroo has announced a ban on all cryptocurrency transactions, effective May 30, 2024. This move means that the bank will reject any bank transfer requests and card transactions related to cryptocurrencies. The updated terms and conditions state that the bank can freeze or restrict accounts involved in purchasing or trading cryptocurrencies. Persistent offenders may face account closures.
Industry-Wide Trend Among UK Banks
Kroo’s decision is not an isolated case. Other UK banks, including Starling Bank and Chase UK, have also implemented similar bans. These measures are largely in response to the increasing association of cryptocurrencies with scams and fraud. Data from Britain’s fraud reporting agency, Action Fraud, shows a 41% surge in crypto fraud last year, amounting to £306 million. This alarming trend has prompted banks to take precautionary measures to protect their customers and themselves from potential financial losses.
Impact on Customers and the Crypto Market
The ban will significantly impact Kroo’s customers who are involved in cryptocurrency trading. The bank has advised affected customers to instruct payees making direct debits to their accounts to stop such payments. This move is expected to cause inconvenience to crypto traders who rely on bank transactions for their trading activities. However, the bank believes that this step is necessary to mitigate the risks associated with crypto-related fraud.
Responses from Other Major Banks
Chase UK, a digital bank owned by JPMorgan, also prohibited its customers from conducting cryptocurrency transactions in late 2023. The bank cited an increase in scams and fraud in the cryptocurrency space as the primary reason for this decision. Similarly, Starling Bank described cryptocurrency activities as “high risk and heavily used for criminal purposes” and banned all customer payments related to cryptocurrencies. Following the bankruptcy of FTX, other major banks like Lloyds, Barclays, and RBS also cut off card purchases and transactions involving cryptocurrency, fearing potential financial losses if customers could not repay their debts.
Conclusion
Kroo’s decision to ban cryptocurrency transactions is part of a broader trend among UK banks to address the growing risks associated with crypto-related fraud. While this move may inconvenience some customers, it underscores the banks’ commitment to safeguarding their financial systems and protecting their customers from potential scams. As the crypto market continues to evolve, it remains to be seen how these measures will impact the broader financial landscape and the future of cryptocurrency trading in the UK.
