Dearest bank, please stop trying to prevent me from buying crypto!

This digital gold rush is ruining many lives and the powers that be say they are trying to prevent you from becoming the next crypto victim.

I recently wrote an article where I put together a list of banks that are banning customers from transferring funds to some of the largest crypto exchanges in the world.

Banks say they are protecting their customers from fraudsters and that crypto exchanges are not performing adequate security checks to stop criminals from laundering money through their platforms.

They also say that many retail investors haven’t got a clue when it comes to investing and that they do not understand the dangers that volatile markets bring, especially the crypto market.

As experienced investors, we all know the dangers that come with investing, and we all (should) know never to invest what one can not afford to lose, but the sad truth is that this is not the case for those starting out. Inexperienced retail investors are putting their life savings on the line in the hope of becoming crypto millionaires, and this is one of the many reasons the powers that be, are trying to prevent. So they say.

I was surprised at the number of emails I received from readers expressing their anger at having experienced issues with their banks when trying to fund their crypto accounts.

“It’s my money, and I can do what I want with it”

Out of all of the emails received, the most common comment was, “It’s my money, and I can do what I want with it”. True, and I agree with them to a certain extent. I know how vexing and inconvenient it can be, and I empathise because all these measures have done is force people to find alternative, riskier methods to fund their crypto addiction.

But my response here has always been – what if you were at the receiving end? What if you just happened to join the list of the many thousands of individuals who have been conned out of their hard-earned money? What if in a minute of madness you invested all your savings and wake up to find that you have nothing left? How would you feel then? Would you still be angry at your bank for trying to prevent this from happening to you? I very much doubt it.

I still do think that banks have got this wrong, very wrong. The measures put in place are intrusive and dictatorial, and what they should have done is put in some sort of monthly cap instead of completely banning crypto trading.

Crypto exchanges are also to blame and until cryptocurrencies become regulated forcing exchanges to adhere to local laws, people will continue to get burnt.

If you are starting out and are thinking of investing in cryptocurrencies do a little research, don’t just jump in all guns blazing just because your next-door neighbour is telling you that this time next year, he will be a millionaire. That’s a fool’s game.

Start small and only invest what you can afford to lose. As previously mentioned, banks will not involve themselves if you are buying cryptocurrencies from FCA regulated companies such as eToro. eToro is considered safe because its UK arm is regulated by top-tier financial authorities and it is a well-known fintech company.

Not Investment Advice Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.

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