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 concerning the dangers posed by digital foreign money to clients.

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

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

“Members can 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 doable danger to clients citing the FCA’s considerations that cryptocurrencies are high-risk speculative property.

Charles Kerrigan, a crypto and digital property associate with regulation agency CMS urged that banks are taking a extra cautious strategy to crypto as the brand new shopper obligation will put extra strain 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 getting ready for the brand new shopper obligation guidelines which put them on the hook for patrons’ unhealthy selections,” he mentioned.

The strikes come after Santander launched limits on the quantities clients 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 mentioned “We undertake a danger primarily based strategy to how we profile crypto exchanges. Which means we could limit funds to particular exchanges primarily based 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 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 corporations failed to satisfy minimal regulatory necessities when making use of for registration.

The UK authorities is imposing rules on the crypto trade in an try to “embrace technological change” whereas defending customers from the chance.

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