UK-based digital bank Kroo has announced that it will prohibit its customers from engaging in cryptocurrency transactions starting from May 30. The bank stated that this decision is aimed at ensuring the safety of user accounts and funds. According to the updated terms and conditions, Kroo will no longer process bank transfers or card payments related to crypto asset providers. Additionally, the bank may freeze or restrict accounts involved in purchasing or trading cryptocurrencies and potentially even close accounts that receive credits from crypto transactions. This move comes as there has been a significant increase in online scams and frauds related to cryptocurrencies. Lloyds Bank in the UK recently issued a warning about the rising number of crypto scams, which saw a 23% surge last year, particularly targeting younger investors. The average loss for crypto victims was £10,741, the highest among all types of scams. Kroo Bank joins other UK challenger banks such as Starling Bank and Chase UK in banning crypto-related transactions. Starling Bank implemented a ban on crypto transfers in 2022, citing the high risk associated with crypto activity. Chase UK, JPMorgan’s British retail bank, also restricted customers’ access to cryptocurrencies due to concerns over their illicit use. NatWest Bank in the UK has also imposed limitations on crypto spending for its customers, allowing them to make up to £1000 worth of crypto payments per day and £5000 in a 30-day period. The ban by Kroo Bank could be seen as overly harsh by the crypto community, as it completely prohibits all crypto-related activity. It is worth noting that the ban may be influenced by regulatory challenges and the lack of trust in cryptocurrencies, as highlighted by the UK’s Financial Conduct Authority’s marketing transparency regulations. Some experts suggest that instead of implementing a ban, more robust safety measures could be introduced to address theft and loss issues associated with cryptocurrencies.
