Crypto ban expands across UK banks as Starling joins crackdown
UK digital bank Starling has banned all customer payments related to cryptocurrencies, another blow for the crypto traders who recently saw a sizable number of banks deciding not to finance the wobbly asset class.
Describing the activity as “high risk and heavily used for criminal purposes,” the challenger bank told cardholders they are no longer allowed to purchase cryptos or receive incoming transfers from related exchanges or merchants.
“We consider crypto activity to be high risk. We’ve taken the decision to prevent all card payments to crypto merchants and to implement further restrictions on outgoing and incoming transfers,” the online bank said in a statement as well as on Twitter.
“The innovative technology, and thinking, behind cryptocurrencies have great potential advantages, however, right now, they are high risk and heavily used for criminal purposes and, as such, we no longer support them,” Starling added.
Starling’s decision follows several of the biggest UK banks banning cryptocurrency transaction over the past few weeks, as part of a global crackdown led by major lenders and credit card issuers. While Starling is not the first, but the action exacerbates pressures and make it more difficult for enthusiasts to buy into the market as more other banks could shortly follow suit.
Following the bankruptcy of FTX, the world’s second largest cryptocurrency exchanges, Lloyds, Barclays and RBS cut off card purchases and transactions involving cryptocurrency. The banks fear that allowing purchases of cryptocurrencies using money borrowed on credit cards could leave them on the hook if the buyers’ bets were wrong and couldn’t repay their debts.
Santander UK, the UK unit of banking giant Banco Santander, also placed restrictions on crypto transactions for its customers. In a note dated November 15, the bank said this includes a £1,000 limit on individual transactions with crypto exchanges and a £3,000 limit on total monthly transactions. However, the London-based banks doesn’t limit funds transferred from crypto exchanges back into Santander accounts.
Even before FTX fallout, many UK banks banned its customers from transferring funds to Binance after the Financial Conduct Authority (FCA) issued a warning it was not permitted to undertake any regulated activity.
