Starling Bank restricts crypto-related transfers

Starling customers have never been able to hold cryptocurrencies with the neobank, but the announcement means they will no longer be able to use a Starling account to withdraw or deposit fiat money into or out of crypto exchanges as well.

The main reason for the move is the high-risk levels that crypto activity involves, as the company sees it. Therefore, the company has taken the decision to prevent all card payments to crypto merchants and to implement further restrictions on outgoing and incoming transfers.

The neobank made the move after the collapse of crypto exchange FTX sent crypto markets on a downwards spiral. However, as information gathered from social media suggests, customers were not given any warning or lead-up time to the decision.

Starling has recently tightened restrictions on inbound and outbound transactions by card and bank transfer. The newly launched message was to make sure that customers who have made such transactions in the past, but not recently, are aware of this.

As the company sees it, the innovative technology behind cryptocurrencies has potential advantages, however, right now, they are risky and used for criminal purposes and, as such, supporting them is not in their plans.

Crypto not fit for Starling Bank

It’s not the first time that the neobank has been critical of crypto. Starling’s CEO, Anne Boden, voiced her opinion in June, saying that customers were being scammed by players in the sector. The way she sees it, the company is spending more of its time protecting customers from the scammers than trying to promote crypto.

Several UK high street retail banks like Lloyds TSB, Virgin and Santander have toughened their stance on cryptocurrencies recently — but their measures have mainly focused on preventing the purchase of crypto assets. 

Starling’s restrictions on transactions both ways will mean that customers that may be cashing out their cryptocurrencies in the wake of the FTX collapse will not be able to deposit their funds into their bank accounts. This could send customers elsewhere, to rival neobanks like Revolut and Monzo, where they can still deposit.