In an effort to “help keep user accounts and money secure,” the London-based challenger bank Kroo has barred its clients from participating in cryptocurrency transactions.
“Effective 30th May 2024, in order to enhance the security of your account and funds, we have decided to discontinue the processing of bank transfers or card payments pertaining to and for suppliers of crypto assets,” said the bank’s revised terms and conditions.
Additionally, Kroo Bank said that it will “freeze or limit accounts” that were used to buy or trade cryptocurrency. Additionally, it might prevent funds from reaching accounts that earn cryptocurrency trading or transaction credits.
This shift occurs as the number of internet scams and frauds using cryptocurrency continues to rise at an alarming rate.
There was a 23% increase in cryptocurrency frauds aimed at younger investors last year, prompting the UK’s Lloyds Bank to issue a stern warning. The average victim of a cryptocurrency fraud has lost £10,741, more than any other kind of scam, according to the warning.
In the United Kingdom, Kroo Bank follows in the footsteps of Starling Bank and Chase UK in prohibiting cryptocurrency transactions. Citing “crypto activity to be high risk,” Starling Digital Bank banned cryptocurrency transactions in 2022. Concerned about the potential for illegal usage of cryptocurrency, Chase UK, the British retail arm of JPMorgan Chase, limited client access to the asset class in October.
In a similar vein, NatWest Bank of the United Kingdom restricted its clients’ ability to use cryptocurrency. Customers of NatWest may only make cryptocurrency payments up to £1000 per day and £5000 every 30 days, according to the bank.
This is a complete prohibition, not just a restriction. Along with fraud, regulatory difficulties may have contributed to the decision to impose the ban.
The marketing transparency requirements put in place by the UK’s Financial Conduct Authority (FCA) have cast doubt on the trustworthiness of cryptocurrency.
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