- UK-based digital bank Kroo has announced a ban on crypto transactions effective May 30, 2024.
- This decision is part of Kroo’s efforts to enhance user account security and prevent fraud.
- “From 30th May 2024, to help keep your account and money safe, we will no longer process bank transfers or card payments related to and from crypto asset providers,” the bank’s updated terms and conditions read.
Kroo Bank bans crypto transactions to enhance security, joining other UK banks in combating rising crypto scams and fraud.
UK Digital Bank Kroo to Ban Crypto Transactions Effective May 30
London-based challenger bank Kroo has banned its customers from engaging in crypto transactions in order to “help keep user account and money safe.” The bank’s updated terms and conditions state, “From 30th May 2024, to help keep your account and money safe, we will no longer process bank transfers or card payments related to and from crypto asset providers.”
Further, Kroo bank noted that it would “freeze or restrict accounts” used to purchase or trade in crypto. It would also potentially block accounts that receive credits from crypto trading or transactions. “If we detect such activity we will not process the payments involved, and if you persistently make such transactions we may close your account,” the bank warned.
The move comes at a time when there is a staggering increase in crypto-related online scams and frauds. Recently, the UK’s Lloyds Bank issued an urgent warning over rising crypto scams that surged 23% last year, targeting younger investors. The warning noted that crypto victims have lost £10,741 on average, more than any other type of scam.
Kroo Bank is the latest among other UK-based challenger banks including Starling Bank and Chase UK, in banning crypto-related transactions. Starling digital bank issued a ban on crypto transfers in 2022, citing “crypto activity to be high risk.” Last October, Chase UK, JPMorgan’s British retail bank, restricted customers’ access to crypto amid raising concerns over its illicit use.
UK’s NatWest Bank took a similar approach, where it had set limitations on crypto spending for its customers. NatWest noted that its customers can only make up to £1000 worth of crypto payments per day and £5000 in 30-days.
Too Harsh on the Crypto Community?
The move is not a limitation, but an outright ban. Alongside fraud, another reason for the ban could be regulatory struggles. Crypto’s trust has been recently called into question by the UK’s Financial Conduct Authority’s (FCA) marketing transparency regulations.
Kroo’s move further emphasizes the idea that cryptocurrencies are untrustworthy. David Janczewski, CEO of Blockchain protection company, CoinCover highlighted during Chase’s crypto ban, “Instead of banning all crypto-related activity, which may ultimately cause customers to leave, it is possible to prevent theft and loss by introducing more robust safety measures which can tackle these issues at source.”
Conclusion
In summary, Kroo Bank’s decision to ban crypto transactions is a significant move aimed at protecting customers from the rising tide of crypto-related fraud. While it may seem harsh to the crypto community, the bank believes it is a necessary step to ensure the safety and security of its users. As other banks like Starling, Chase UK, and NatWest have taken similar measures, it remains to be seen how the broader financial ecosystem will adapt to these changes and what impact it will have on the future of cryptocurrency transactions in the UK.
