The British Banking sector is taking steps to combat cybercrime by preventing customers from making cash transfers to cryptocurrency exchanges.
The cryptocurrency market has become a target for fraudsters. Con artists are increasingly using crypto exchanges to transfer and convert victims’ funds into untraceable cryptocurrencies.
The financial watchdog (FCA) reported that UK consumers had lost more than £60 million due to social media investment scams in the past year.
In June 2021, the Financial Conduct Authority prohibited Binance Markets Ltd from operating in the UK due to noncompliance with regulatory requirements, and this decision remains in effect today.
In response to the decision, many UK banks took steps to prevent their customers from transferring funds to cryptocurrency exchanges.
Trading platforms such as Binance, Kraken, Kucoin, and Coinbase do not perform adequate security checks to prevent criminals from using them to launder money, according to banks.
Kraken and Binance denied the claims and said that they take money laundering and the responsibility of protecting users from fraud very seriously.
The number of UK banks banning customers from interaction with cryptocurrency exchanges is increasing, with the likes of Barclays, TSB, and Santander completely blocking transfers to any exchange.
I tested this by using my Coinbase, Binance, and Kraken accounts. I transferred funds from my personal Barclays account to Kraken, and it was successful, my account was funded and I was able to withdraw back to my account without any issues. However, Halifax and Natwest blocked me from transferring money to Coinbase and Binance.
What UK banks have banned crypto buying?
Let’s take a look at some of the UK banks that are preventing customers from engaging in any activities related to cryptocurrencies which include popular exchanges such as Kraken, Binance, and Coinbase.
One thing to note is that banks will not involve themselves if you are buying cryptocurrencies from FCA-regulated companies such as eToro.
eToro is considered safe because its UK arm is regulated by top-tier financial authorities and it is a well-known fintech company.
UK Banks:
- Natwest
- Barclays
- TSB
- Monzo
- Starling Bank
- Lloyds Bank / Halifax
- HSBC
- Santander
- Metro Bank
- Nationwide
- Tesco Bank
- Virgin Money
Natwest
Business Banking: Prohibited
Personal Banking: Under Review, Binance Prohibited
Natwest will not accept and will terminate its business relationship with any UK business receiving or thinking of accepting crypto as a form of payment. They have also warned personal banking customers that they will conduct extra financial crime checks on those who want to dabble in cryptocurrencies. Binance transfers have been strictly prohibited.
Natwest cryptocurrency FAQs
Barclays
Business Banking: Under Review
Personal Banking: Under Review
Although Barclays has begun taking measures to ban crypto buying, it seems they are currently only blocking money transfers to some exchanges including Binance and SwissBorg. Barclays were in business with Coinbase until 2019 but ended the working relationship due to money laundering concerns.
TSB
Business Banking: Prohibited
Personal Banking: Prohibited
TSB recently announced plans to ban all 5 million customers from transferring payments to all crypto exchanges, including Binance and Kraken.
TSB cryptocurrency FAQs
Monzo
Business Banking: Prohibited
Personal Banking: Accepted
Monzo has changed its stance on crypto with the bank now saying they are crypto-friendly.
From time to time Monzo may block a small number of transactions based on risk.
Monzo cryptocurrency FAQs
Starling Bank
Business Banking: Under Review
Personal Banking: Under Review
Starling Bank initially decided to suspend all payments to crypto exchanges; however, the digital bank has said it will resume cryptocurrency exchange transfers on June 23 2021, after a rigorous enhanced payment review.
Lloyds Bank
Business Banking: Prohibited
Personal Banking: Under Review
Lloyds bank placed a ban on buying cryptocurrencies on its credit card. The bank continues to assess other types of payment on a case-by-case basis. This also extends to Halifax and the Bank of Scotland.
HSBC
Business Banking: Prohibited
Personal Banking: Prohibited
HSBC strictly prohibits customers from sending or receiving money from any crypto exchange. They have recently also stopped allowing customers using HSBC credit cards to fund their accounts.
Santander
Business Banking: Prohibited
Personal Banking: Prohibited
Santander has announced that from 2023 it will block all UK transfers to crypto exchanges. Customers will still be able to receive payouts from crypto exchanges in their accounts.
Metro Bank
Business Banking: Prohibited
Personal Banking: Prohibited
Like Natwest, Metro Bank will not do business with any company accepting cryptocurrencies. The bank will also close personal accounts with a high volume of transactions from and to crypto exchanges.
Nationwide
Personal Banking: Under Review, Binance Prohibited
Nationwide has imposed a £5,000 daily limit on current account crypto spending. However, the bank has stressed that it will review any unusual activity including payments to crypto exchanges.
Virgin Money
Virgin Money has been blocking customers from purchasing crypto on their credit cards as far back as 2018 and the restriction remains in place.
Tesco
Tesco closed down its banking arm in November 2021 but credit cards are still on offer.
The supermarket giant recently said anyone using their Tesco credit card to fund Crypto trading accounts will be automatically blocked.
Regulation
Investors are likely to face constraints when financing cryptocurrency investments on unregistered exchanges in the UK until there is a well-defined regulatory framework and guidance in place.
Read More
- Where can you buy cryptocurrencies in the UK?
- Are there now more crypto-friendly banks in the UK?
Share your story
We would appreciate it if you could share your experiences and thoughts in the comments section below regarding any challenges you may have faced while transferring funds to and from cryptocurrency exchanges using your bank.
