- JPMorgan’s Chase UK has elected to ban cryptocurrency purchases for its UK customers starting from October 16
- The move is in response to the surge in crypto-related scams and fraudulent activities in the UK
- The Financial Conduct Authority is set to introduce new regulations for UK-based crypto firms from October 8
JPMorgan’s UK subsidiary, Chase UK, has announced that it will prohibit customers from purchasing cryptocurrencies from October 16. The move comes in response to the growing incidence of crypto-related scams and fraud in the UK, including deceptive investments and false celebrity endorsements. Chase is the latest in a long line of UK banks and credit card providers who now prevent their customers from dealing with crytpo entities, including Starling and Santander, while others have limited how much customers can buy.
Fraud Concerns Behind Chase Actions
Chase customers were notified of the change in policy by email yesterday, explaining that the action had been taken to “protect our customers and keep their money safe”, advising those wishing to invest in the crypto space to use another bank.
According to Action Fraud, crypto-related fraud losses in the UK exceeded £300 million for the first time in the year ending March 2023, marking a more than 40% increase. Some estimates suggest that up to 25% of transactions from customer accounts to crypto firms are linked to fraudulent activities.
New Rules Coming Next Month
While several banks like HSBC and NatWest have imposed restrictions on crypto purchases, outright bans are relatively uncommon, with only Starling Bank and TSB issuing total bans. In 2021 Santander banned deposits to Binance two years after preventing deposits to Coinbase. JPMorgan had previously announced in 2018 that it would prohibit customers from buying cryptocurrencies with credit cards.
In response to concerns about misrepresentation, the Financial Conduct Authority (FCA) will implement new rules for crypto firms operating in the UK starting October 8, which will include a ban on “refer a friend” promotional schemes.
This has led to some outfits such as ByBit electing to leave the country rather than rework their policies to fit with the new guidelines, as the likes of BitStamp have done.