TSB is the latest UK bank to ban customers from buying cryptocurrencies.
The bank, a subsidiary of Spanish Sabadell Group, will ban more than 5 million customers from buying or selling crypto amid concerns that trading platforms such as Kraken and Binance are swarming with fraudsters.
A representative for the bank said: “We take our obligation to protect customers extremely seriously and continually review merchants and websites with excessively high fraud rates.”
TSB is not the first British bank to ban its customer from investing in cryptocurrencies. Natwest, Barclays, Monzo and Starling have also taken measures to block cash transfers to cryptocurrency exchanges in recent weeks.
The bank’s decision follows increased concerns that fraudsters are using crypto exchanges to transfer and convert victim’s money into untraceable cryptocurrencies, reports The Times.
According to TSB, one in eight payments to crypto exchanges ends up in the hands of fraudsters, and two-thirds of all crypto fraud is linked with Binance.
The bank also suggests that Binance has failed to reply to reports of customer fraud. However, Binance denies the claims and told the Times it was “very serious” about its responsibility to protect users from fraud.
The UK’s financial watchdog (FCA) has said that the level of understanding over cryptocurrencies has decreased and that novice crypto investors risk losing all of their money due to not knowing what they are buying.
The Bank of England Governor Andrew Bailey also recently warned UK investors that they should be prepared to lose all of their money when investing in cryptocurrencies.