JPMorgan’s UK bank will stop customers buying cryptocurrencies from next month to combat rising numbers of criminals using digital assets to target victims.
The ban by Chase UK, which notified customers by email on Tuesday, marks a step up as British lenders try to stop their networks being used for scams and frauds.
While several banks, including HSBC and NatWest, have set restrictions on their customers’ purchases for crypto, outright bans are rare.
Chase said its UK block, which will come into effect from October 16, had been informed by data showing the high rate of crypto scams and fraud in the UK, including fake investments and false celebrity endorsements.
Crypto-related fraud losses increased more than 40 per cent in the year to March 2023, surpassing £300mn for the first time, according to data from fraud reporting agency Action Fraud. One senior banker estimated that between 20 and 25 per cent of transactions sent from their customers’ accounts to cryptocurrency firms were related to fraud.
“We’ve seen an increase in the number of crypto scams targeting UK consumers, so we 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,” 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 cryptocurrencies with credit cards. Chief executive Jamie Dimon has been a longstanding critic of cryptocurrencies and said in January that bitcoin, the oldest and best-known token, was a “hyped-up fraud”.
Chase, which hit 1.6mn customers in May and has £15bn in deposits, represents only a small part of the UK retail market. Even so, a growing number of lenders now limit how customers can purchase digital assets. In March, NatWest set limits on transactions to exchanges to “protect consumers [from] losing life-changing sums of money”. A month earlier, HSBC announced customers would no longer be able to buy cryptocurrencies with their credit cards.
High street challenger TSB began blocking crypto in 2021, citing the high rate of fraud, 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 oversee the asset class.
In an effort to clamp down on misrepresentation, crypto firms operating in the UK will have to stick to new rules imposed by the Financial Conduct Authority from October 8, which include a ban on ‘refer a friend’ type promotions.
