Nationwide limits crypto exchange payments as consumer risk fears grow

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

In an electronic mail to prospects 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 attainable 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 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 mentioned this was due to the attainable danger to prospects citing the FCA’s considerations that cryptocurrencies are high-risk speculative belongings.

Charles Kerrigan, a crypto and digital belongings companion with regulation agency CMS advised that banks are taking a extra cautious strategy to crypto as the brand new shopper responsibility will put extra stress on banks to guard their prospects.

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

The strikes come after Santander launched limits on the quantities prospects might switch to crypto exchanges in November final 12 months, 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 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’ve in place to make sure we will proceed to guard prospects from the evolving threats posed by criminals.”

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

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

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