British high-street creditors tighten their crypto posture in terms of fraud problems

British high-street creditors tighten their attitude towards cryptocurrencies and refer to an increasing flood of fraud in connection with high-volatile and speculative assets.

Your position is in contrast to some fintechs that penetrate the sector deeper, even though the prices crash and large players collapse. FTX, one of the largest crypto trading places in the world, dissolved in a spectacular way last week when the rival bony dropped a rescue in the eleventh hour and led to fear of infection.

"The collapse of FTX is just another data point that tells us that we did the right thing," said Paul Davis, director of fraud prevention at TSB, who blocked crypto. "The risks for consumers are enormous."

Both Santander UK and Virgin Money have taken measures to restrict or stop the purchase of cryptocurrencies from customers in the coming months.

Santander said at the beginning of this month that it would limit the amount that could spend the customer from November 15 for cryptocurrency exchanges with online and mobile banking payments. It said that the step by "a great increase in British customers who are victims of cryptocurrency fraud", drove up all faster payments to cryptocurrency exchanges next year.

Virgin will prevent both existing and new customers from buying cryptocurrencies by the end of this month.

"Due to the increase in fraudsters who use cryptocurrency to receive money, we wrote to customers to let them know that we will not process any payments in cryptocurrency in the future," said Virgin.

Your measures reflect the cautious approach of most high-street creditors compared to cryptocurrencies, which, according to a senior banker for fraudsters, have become "the main path for payouts".

While TSB was the first bank last year to prohibit its customers all payments in cryptocurrency, bides borrowers such as Lloyds, Natwest and Virgin 2018 banned the purchase of cryptocurrencies with credit cards.

A number of lenders also began to block payments to Binance in 2021 after the Financial Conduct Authority declared that it was not entitled to make crypto business within the United Kingdom.

With the exception of Binance,

Barclays are currently not limited to stockings, while other lenders such as NATWEST limit payments to certain stock exchanges, of which they say that they are "the highest risk of financial damage".

The annual losses due to cryptoc fraud, the Action Frau, the United Kingdom's national reporting center, had already been reported by 160 million pounds by the end of August, more than the amount for the entire year 2021.

"It is simply a paradise for fraudsters," said a senior employee one of the largest high street banks, with a fifth of payments on some stock exchanges being fraudulent. "We have to regulate crypto and we don't have that."

A report of the Oberhaus published on Saturday also expressed concerns about the use of cryptocurrencies for fraud and asked the government to work with the private sector to strengthen the "Know your Customer" exams.

"We think it is understandable that the banks would treat this as a warning signal," said Baroness Nicky Morgan, chair of the House of Lord's committee, which is behind the report, and non-executor at Santander UK. "According to the evidence that we have heard and saw, crypto is often involved in fraud."

The FCA said last month that the number of potential crypto scams reported by consumers has increased by 55 percent compared to the end of March.

The regulatory authority said that it did not instruct the banks not to allow transfers to cryptocurrency exchanges anymore, but emphasized that digital assets were "risky investments and largely unregulated".

The upcoming law on financial services and markets will enable more regulatory supervision over the crypto sector. At the moment, the FCA only monitors the approach of companies to combat money laundering.

Cryptouk, a trade organization for the industry of digital assets, said that fraud is increasing on a broad front, not only in connection with cryptocurrencies.

"There are many ways to try to get them to separate them from their digital money. We urgently ask investors to be smart and carry out a DUE diligence test." it added.