Nationwide limits crypto exchange payments as consumer risk fears grow

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

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

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

“Members will even be prevented from utilizing a Nationwide bank card to buy crypto property.”

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 potential threat to clients citing the FCA’s issues that cryptocurrencies are high-risk speculative property.

Charles Kerrigan, a crypto and digital property companion with legislation agency CMS instructed that banks are taking a extra cautious method to crypto as the brand new shopper obligation will put extra stress 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’ 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 threat based mostly method to how we profile crypto exchanges. Because of this we could prohibit funds to particular exchanges based mostly on the extent of threat 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 fulfill minimal regulatory necessities when making use of for registration.

The UK authorities is imposing rules on the crypto business in an try and “embrace technological change” whereas defending customers from the danger.

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