JPMorgan’s digital bank bans crypto transactions
Chase UK, the British digital bank owned by JPMorgan, will prohibit its customers from conducting cryptocurrency transactions, starting from October 16. This prohibition includes using debit cards for crypto purchases or conducting outgoing bank transfers for crypto-related activities.
Chase, which made its European debut in the UK in September 2021, attributes the decision to the increased incidence of scams and fraud in the cryptocurrency space.
“We’ve seen an increase in the number of crypto scams targeting UK consumers, so we have taken the decision to prevent the purchase of crypto assets on a Chase debit card or by transferring money to a crypto site from a Chase account,” Chase said in an email to customers.
JP Morgan’s neobank cites an increase in scams and fraud in the cryptocurrency space, as well as reports of rising crypto fraud-related losses in the UK. Data from Britain’s fraud reporting agency Action Fraud, shared by the law firm RPC, indicates that crypto fraud in the UK surged by 41% in the previous year, reaching a record high of £306 million ($372.3 million).
“If we think you’re making a payment related to crypto assets, we’ll decline it. If you’d still like to invest in crypto assets, you can try using a different bank or provider instead — but please be cautious, as you may not be able to get the money back if the payment ends up being related to fraud or a scam,” a spokesperson for the bank added.
Chase’s decision follows several of the biggest UK banks banning cryptocurrency transaction over the past months, as part of a global crackdown led by major lenders and credit card issuers. While Chase 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.
UK digital bank Starling also banned all customer payments related to cryptocurrencies last year, 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.
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. 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.