J.P. Morgan’s UK banking arm Chase UK will stop its customers from buying cryptocurrencies from next month. Chase UK will stop its customers buying cryptocurrencies in the UK next month as it looks to clamp down on the number of criminals that are using digital assets to target bank customers.
Chase Bank UK to ban cryptocurrency payments from mid-October
The ban which will come into effect on October 16th, is the latest step by UK banks which are frustrated by the way that criminal gangs exploit the banking networks to perpetrate scams and frauds.
Other lenders such as TSB, HSBC, Natwest and Starling Bank have previously placed limits or restrictions on the activities of their customers, in relation to cryptocurrency transactions, but Chase UK is the first to impose an outright ban.
Too many scams
The US-owned bank, which is a relative newcomer to the UK banking market, emailed customers earlier this week to notify them of its intentions.
The bank said that its decision had been informed by data that showed high levels of crypto scamming and fraud in the UK which included fake investment schemes and celebrity endorsements.
Something that we have raised concerns about on a number of occasions.
Increasing losses and growth in fraudulent activity
Losses incurred as a result of crypto fraud have risen by +40% to more than £300 million in the year ending March 2023, according to data from Action Fraud, the UK fraud reporting agency.
There has also been a sharp rise in the number of legal cases being brought forward, as victims of crypto fraud seek redress through the civil courts.
Chase UK’s decision to impose a ban on crypto-related transactions is not part of a wider policy initiative by parent JP Morgan.
Since its launch, the UK bank has acquired 1.60 million customers who hold around £15.0 billion on deposit.
The ban on crypto-related payments is more understandable when you realise that some informed estimates suggest that as many as 25% of all payments to cryptocurrency firms, made by customers of UK banks, are fraud-related.
An unregulated grey area in the UK
Cryptocurrencies remain largely unregulated in the UK creating something of a grey area. Though the FCA has introduced new rules around the financial promotion of, and risk warnings about crypto investments. Those rules will come into effect on October 8th.
As is often the case, the actions of scammers and fraudsters have forced banks into drastic action, which will no doubt impinge on the activities of legitimate businesses and investors within the crypto space.
The current situation once again calls into question the decision by the FCA, to ban cash-settled CFDs on cryptocurrencies, for UK retail traders, back in January 2021.
A move which only appears to have driven crypto enthusiasts into the arms of outright fraudsters, who seem largely able to operate with impunity, both on and offshore.