Chase UK Bans Crypto Transactions Citing Fraud Concerns

Chase UK recently issued a statement notifying customers that it will no longer support the purchase of cryptocurrencies via its debit cards or bank transfers. The bank expressed concerns over the growing risk of fraud related to digital currencies, with data indicating that such fraud has been escalating.

Coinbase CEO Brian Armstrong criticized Chase UK’s decision, calling it unacceptable for private companies to marginalize the crypto industry. He further urged the U.K. government to consider the move, despite acknowledging the nation’s aspiration to emerge as a Web3 and crypto hub.

Coinbase CEO Brian Armstrong Reacts

Armstrong voiced his displeasure over JPMorgan Chase’s decision to prevent crypto-related transactions at its U.K. digital banking subsidiary, Chase UK. He stated that it’s not acceptable for banks to “de-platform” the entire industry. He emphasized that the government should decide what is permissible and what isn’t.

Crypto Fraud in the UK

Chase UK’s decision to ban crypto transactions is not an isolated incident. Other British banks have also taken similar steps due to fraud concerns. Some of these banks include NatWest, which imposed limits on the amount of money that can be sent to crypto exchanges, and HSBC, which entirely prohibited crypto purchases.

The Rise of Crypto Fraud

According to data from Action Fraud, the U.K.’s fraud reporting agency, losses due to crypto fraud in the U.K. increased by over 40% in the past year, exceeding £300 million for the first time. Cryptocurrencies like Bitcoin, Ether, and XRP, while not recognized as legal currency, have been increasingly adopted by mainstream financial institutions such as PayPal, Visa, and Mastercard. However, they are also associated with illicit activities such as money laundering, terrorist financing, and illegal gambling due to their pseudonymous nature.

The Need for Crypto Legislation in the UK

Despite the issues associated with cryptocurrencies, proponents argue that the industry has matured significantly and could become part of regular payments and trading legitimately. In response, the U.K. is working on legislation to regulate retail trading in crypto assets.

The Financial Services and Markets Bill already includes some provisions on cryptocurrency, aiming to bring crypto assets under regulatory oversight. However, it does not comprehensively address crypto through specialized laws. The U.K. might pass a crypto-specific law by April 2024, according to Economic Secretary to the Treasury Andrew Griffith.

In the meantime, Armstrong urged the U.K. government to consider Chase UK’s decision to ban crypto payments, recognizing the nation’s ambition to establish itself as a Web3 and crypto hub. Despite being disappointed with Chase UK’s stance, Armstrong expressed hope that the situation will be clarified in the coming weeks.