JPMorgan’s Chase UK is tightening its stance on crypto currency as scams and fraudulent activities related to crypto surge. From October 16th, Chase UK will bar its customers from making any crypto transactions via their debit cards or bank transfers.
Chase, globally known for its fee-free banking services through its mobile app, boasts over 50 million active users. However, this restriction will affect only the UK segment of its customer base, approximately 1.6 million users.
In an email notification to its clients, Chase articulated, “We will decline payments linked to crypto assets. For crypto investments, consider approaching another bank or provider.”
Recent figures from Action Fraud, the UK’s leading reporting centre for fraud, painted a concerning picture. The data revealed that crypto fraud in the nation spiked by 41% in the past year, culminating in a record-breaking £306mn (€352mn).
The Office for National Statistics threw more light on this situation, indicating that a whopping 40% of all documented crimes in England and Wales last year revolved around fraud, with crypto scams being a significant contributor.
Chase UK isn’t alone in this endeavor. In the recent past, other major banks in the UK have taken similar preventive measures. NatWest, for instance, established daily and monthly limits on transactions with cryptocurrency exchanges, ensuring customers don’t lose huge amounts in potential scams. Meanwhile, HSBC made a move to stop its customers from purchasing cryptocurrencies using their credit cards.
Banks such as Starling and Santander UK took even more stringent steps. They completely prohibited the trading of cryptocurrencies on their platforms.
The backdrop of this is the largely unregulated status of cryptocurrencies such as Bitcoin and Ether in the UK and Europe. This lack of regulation has brought concerns, leading to officials actively seeking solutions for enhanced oversight on crypto sales and distribution.
A step in the right direction is the UK’s new regulation from 1st September 2023. As per this rule, cryptocurrency businesses will need to adhere to similar protocols as traditional banks, which includes verifying and sharing data on cryptocurrency transfers.
The European Union is not far behind. In May, the EU Parliament settled on the first-ever exhaustive rules set for cryptocurrency transfers. This move is in line with the EU’s commitment to curb money laundering and unauthorized transfers within its territories.