Nationwide limits crypto exchange payments as consumer risk fears grow

A number of UK banks have restricted their clients from shopping for crypto belongings as concern grows in regards to the dangers posed by digital forex to clients.

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

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

“Members may even 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 doable danger to clients citing the FCA’s considerations that cryptocurrencies are high-risk speculative belongings.

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

“The regulators begin and end with client hurt on any query the place retail buyers are involved. The banks are getting ready for the brand new client responsibility guidelines which put them on the hook for patrons’ unhealthy selections,” he mentioned.

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

Lloyds blocked crypto transactions by way of its bank cards in 2018.

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

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

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

The UK authorities is imposing laws on the crypto business in an try and “embrace technological change” whereas defending shoppers from the chance.

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