The British Banking sector has taken steps to combat cybercrime by preventing customers from making fiat money 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 since 2019.
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.
Approximately 47% of the major banks in the UK do not offer support for cryptocurrencies. Out of these, seven banks prohibit both transfers and debit/credit card purchases involving crypto exchanges. Notably, this list comprises high-street banks, except for First Direct.
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 say 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 has increased, with the likes of Barclays, TSB, The Co-operative Bank and Santander completely blocking transfers to all exchanges.
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 issue. However, Halifax and Natwest blocked me from transferring money to Coinbase and Binance instantly.
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↗︎.
Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply.
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
Barclays has stated that it is currently blocking transactions to certain exchanges due to the high number of scams. However, besides Binance and Swissborg, it remains unclear exactly which other exchanges are restricted by the bank.
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 has again decided to suspend all payments to crypto exchanges. They no longer support the buying and selling of cryptocurrencies by debit card, bank transfer in GBP, or by bank transfer in other currencies.
Starling cryptocurrency FAQs↗︎
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 continue facing constraints when financing cryptocurrency investments on unregistered exchanges in the UK until there is a well-defined regulatory framework and guidance in place.
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.
Banks Banning Crypto FAQs
While the majority of UK banks have suspended the buying and selling of cryptocurrencies, some banks have taken a softer approach by allowing customers to initiate transfers to crypto exchanges, provided transactions are kept small and not constant. As our article explains, if you purchase cryptocurrencies with FCA-regulated companies, banks will not interfere.
Several UK banks that have banned cryptocurrency transactions include TSB, Barclays, Halifax, Lloyds, Starling, Virgin Money, Metro Bank, and First Direct. However, it’s important to note that banks frequently review and update their policies, so it’s best to check with your local bank to ascertain their current stance on cryptocurrency transactions.
Yes, HSBC prohibits customers from sending or receiving money from any crypto exchange. This also applies to credit card customers.
Revolut, Monzo, Nationwide, and Barclays are among the banks that generally maintain a positive attitude towards cryptocurrencies. However, it is essential to note that even though they are considered crypto-friendly, they may still occasionally block transactions, specifically to changes such as Binance and Coinbase.
