Starting May 30, U.K. digital bank Kroo will prohibit its customers from conducting cryptocurrency transactions in response to the increasing number of online fraud cases and scams associated with crypto.
Kroo, a London-based challenger bank, has announced a policy change that will no longer allow its customers to conduct transactions involving cryptocurrencies. According to the bank’s updated terms and conditions, accounts will be restricted if used for purchasing, trading, or receiving credits from cryptocurrency transactions. The bank stated, “If we detect such activity, we will not process the payments involved, and if you persistently make such transactions, we may close your account.” Additionally, Kroo reserves the right to freeze accounts suspected of crypto use.
The bank further clarified, “From 30 May 2024, we will no longer support bank transfers or card transactions associated with cryptocurrencies.”
Kroo’s decision follows similar moves by other U.K. challenger banks, such as Starling Bank and Chase UK, which have also issued bans on cryptocurrencies. This trend among smaller, innovative banks comes as they compete against larger, more established financial institutions.
Bank Warnings Against Crypto Fraud
Many global banks have criticized cryptocurrency for being less safe than perceived, with some arguing that crypto transactions are not as anonymous as many users believe. In February, the Central Bank of Russia reported that nearly half of the financial fraud schemes in the country in 2023 involved cryptocurrencies and foreign currencies for payments.
In the United States, Federal Reserve authorities have highlighted the potential for fraud and scams if banks embrace cryptocurrencies and adopt Central Bank Digital Currencies (CBDCs). These concerns underscore the global apprehension within the financial sector about the risks associated with cryptocurrency transactions.
As Kroo and other banks implement these restrictions, it reflects a broader cautious approach towards cryptocurrency, prioritizing customer security and fraud prevention in the rapidly evolving digital financial landscape.
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