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 e mail to prospects earlier this week, Nationwide stated it might 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 considerations from the Monetary Conduct Authority (FCA) over attainable dangers to shoppers.
A Nationwide spokesperson stated: “To assist shield our members from cryptocurrency scams, the Society has launched a every day restrict on debit card funds to crypto belongings of £5,000 per day.”

“Members can 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 prospects citing the FCA’s considerations that cryptocurrencies are high-risk speculative belongings.

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

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

The strikes come after Santander launched limits on the quantities prospects may switch to crypto exchanges in November final yr, whereas NatWest launched restrictions in 2021.

Lloyds blocked crypto transactions through its bank cards in 2018.

A NatWest spokesperson stated “We undertake a danger based mostly strategy to how we profile crypto exchanges. Because of this we might prohibit funds to particular exchanges based mostly on the extent of danger that we expect 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 prospects 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 laws on the crypto trade in an try and “embrace technological change” whereas defending shoppers from the chance.

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