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British bank JPMorgan will prevent its clients from purchasing cryptocurrencies starting next month to combat the growing number of criminals using digital assets to attack their victims.
The ban by Chase UK, which notified customers by email on Tuesday, marks a step forward as British lenders try to prevent their networks from being used for scams and fraud.
While several banks, including HSBC and NatWest, have placed restrictions on their customers' cryptocurrency purchases, outright bans are rare.
Chase said its UK block, which will take effect from October 16, was based on data showing the high rate of crypto scams and fraud in the UK, including fake investments and fake celebrity endorsements.
Losses from cryptocurrency-related fraud increased more than 40 percent in the year to March 2023, surpassing ยฃ300m for the first time, according to data from fraud reporting agency Action Fraud. One senior banker estimated that 20 to 25 percent of transactions sent from his clients' accounts to cryptocurrency companies were related to fraud.
"We have seen an increase in the number of crypto scams targeting UK consumers, so we have made the decision to avoid purchasing crypto assets with a Chase debit card or transferring money to a crypto site from a Chase account " the bank said.
Although Chase UK's move is not part of a group-wide policy, JPMorgan said in 2018 that it would prohibit customers from purchasing cryptocurrency with credit cards. CEO Jamie Dimon has long been a critic of cryptocurrencies, saying in January that bitcoin, the oldest and best-known token, was an "overblown fraud."
Chase, which reached 1.6 million customers in May and has ยฃ15 billion in deposits, represents only a small part of the UK retail market. Still, a growing number of lenders now limit how customers can purchase digital assets. In March, NatWest put limits on transactions on exchanges to "protect consumers". [from] losing sums of money that change lives.โ A month earlier, HSBC announced that customers would no longer be able to purchase cryptocurrency with their credit cards.
Leading challenger TSB began blocking cryptocurrencies in 2021, citing the high fraud rate, while digital bank Starling has prevented the buying and selling of cryptocurrencies since last November.
Cryptocurrencies, including bitcoin and ether, are largely unregulated in the UK, although regulators are assessing how best to supervise this asset class.
In an effort to clamp down on misrepresentations, crypto companies operating in the UK will have to comply with new rules imposed by the Financial Conduct Authority from October 8, which include a ban on promotions such as "Refer this item to a friend".
