UK digital bank Chase, owned by US banking giant J.P.Morgan, has announced that UK customers will soon be unable to purchase cryptocurrency via their Chase bank account.
In this article, we explain why Chase has taken the decision to ban cryptocurrency purchases and when the ban is due to commence.
Why is Chase banning Cryptocurrency purchases?
Action Fraud, the UK's centre for reporting fraud and cybercrime, reported crypto losses through fraud were up 41% from March 2022 to March 2023 when compared to the previous year. Additionally, losses have totalled more than £300 million for the first time.
Banks including HSBC and Natwest have recently taken steps to restrict certain cryptocurrency transactions and TSB and Starling have gone one step further, preventing buying and selling cryptocurrencies through customer accounts.
Chase has taken the decision to ban the purchase of cryptocurrency for its UK customers as part of an effort to combat fraud. It stated, "We have seen an increase in the number of crypto scams targeting UK consumers, so have taken the decision to prevent the purchase of crypto assets on a Chase debit card or by transferring money to a crypto site from a Chase account".
When will Chase start banning cryptocurrency purchases?
Chase will block UK customers from purchasing cryptocurrency from 16th October 2023. This means that Chase UK customers will no longer be able to make cryptocurrency purchases either via their Chase debit card or via bank transfer.
In a note to customers, Chase stated "If you’d still like to invest in crypto assets, you can try using a different bank or provider instead—but please be cautious, as you may not be able to get the money back if the payment ends up being related to fraud or a scam".
Purchasing cryptocurrency in the UK
Buying and selling cryptocurrency has the potential to leave you vulnerable to fraud, especially as digital currencies such as Bitcoin and Ethereum are largely unregulated in the UK. Without the regulation of financial institutions such as the Financial Conduct Authority (FCA), the anonymity that cryptocurrency presents means it is increasingly targeted by criminals to try to defraud unsuspecting victims.
In an effort to tackle some of these issues, crypto companies that operate in the UK will need to adhere to strict new rules from the 8th of October 2023, with firms needing to register with the FCA in order to be approved for certain advertisements and promotions.
Buying and selling cryptocurrency should be carried out with caution and those considering it should take the time to understand the risks, especially as a number of UK banks have taken steps to restrict and in some cases ban the purchase of cryptocurrency. Those new to cryptocurrency should check out our 'Beginner's guide to buying cryptocurrency', to assess both the advantages and disadvantages before purchasing.