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 concerning the dangers posed by digital forex to clients.

In an electronic mail to clients earlier this week, Nationwide stated 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 shoppers.
A Nationwide spokesperson stated: “To assist defend 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 will 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 stated this was due to the attainable danger to clients citing the FCA’s issues that cryptocurrencies are high-risk speculative belongings.

Charles Kerrigan, a crypto and digital belongings accomplice with legislation agency CMS advised that banks are taking a extra cautious method to crypto as the brand new shopper obligation will put extra strain on banks to guard their clients.

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

The strikes come after Santander launched limits on the quantities clients may 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 stated “We undertake a danger based mostly method to how we profile crypto exchanges. Because of this we might limit 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 have now 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 rules on the crypto business in an try to “embrace technological change” whereas defending shoppers from the danger.

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