Chase UK to ban crypto purchases amid rising fraud concerns

The bank informed its customers via email, marking a heightened effort by British financial institutions to prevent their networks from being exploited for scams and fraudulent activities.

While some banks like HSBC and NatWest have imposed restrictions on customers' crypto purchases, outright bans like Chase UK's are uncommon. The decision to block crypto transactions, effective from 16 October, was driven by data revealing a significant surge in crypto-related scams and fraud in the UK. These fraudulent activities include fake investments and misleading celebrity endorsements.

According to data from the fraud reporting agency Action Fraud, losses due to crypto-related fraud increased by over 40% in the year leading up to March 2023, surpassing GBP 300 million for the first time. One senior banker estimated that between 20% to 25% of transactions from their customers' accounts to cryptocurrency firms were linked to fraudulent activities.

Chase UK suggests that they have noticed an increase in fraudulent activities related to cryptocurrencies that specifically target consumers in the United Kingdom. This rise in crypto scams has led the bank to take action by deciding to prevent its customers from buying cryptocurrencies using a Chase debit card or transferring money from a Chase account to a cryptocurrency platform. In essence, they are taking this step to protect their customers from potential scams and financial losses associated with crypto transactions.

It's worth noting that this move by Chase UK is specific to the bank and not part of a broader group-wide policy. However, in 2018, JPMorgan already prohibited customers from buying cryptocurrencies with credit cards. JPMorgan's CEO, Jamie Dimon, has long been a vocal critic of cryptocurrencies and famously referred to Bitcoin, the most well-known cryptocurrency, as a ‘hyped-up fraud’.

The war against crypto

While Chase UK represents only a small segment of the UK retail banking market, an increasing number of financial institutions are implementing restrictions on how customers can engage with digital assets. For example, in March 2023, NatWest introduced transaction limits for exchanges to protect consumers from significant financial losses. HSBC also announced a prohibition on buying cryptocurrencies with their credit cards a month earlier.

In 2021, TSB, a high street challenger bank, began blocking crypto transactions citing the high rate of fraud, and digital bank Starling has been preventing the buying and selling of cryptocurrencies since November of the previous year.