JPMorgan Chase & Co.’s UK digital bank, Chase UK, has announced that it will block customers from making crypto transactions, citing an increase in frauds and scams related to cryptocurrencies. Chase UK clients will no longer be able to make crypto transactions via debit card or by outgoing bank transfer from Oct. 16, according to an email sent to customers.
“To help you keep your money safe from frauds and scams, we’re changing the types of payments you can make from Chase,” the email said. “If we think you’re making a payment related to crypto assets, we’ll decline it.”
Chase UK, which launched in September 2021, is one of the UK’s most popular neobanks, attracting 1 million customers after its first year of operation. It joins lenders like HSBC Holdings Plc and Nationwide Building Society, which tightened limits on retail customers’ access to cryptoassets earlier this year, citing the risks they pose.
Crypto scams on the rise in the UK
The decision by Chase UK to ban crypto payments comes amid a surge in crypto scams targeting UK consumers. According to the Financial Conduct Authority (FCA), the UK’s financial watchdog, more than 5,000 people reported losing a total of £113 million ($155 million) to crypto-related fraud in the first six months of 2023. This is a 222% increase from the same period last year, when 1,500 people reported losing £34 million ($47 million) to crypto scams.
The FCA warned that scammers are using various tactics to lure unsuspecting victims into investing in fake or unregulated crypto schemes, such as impersonating celebrities or reputable firms, offering high returns or free giveaways, or using phishing emails or fake websites. The FCA also reminded consumers that most crypto investments are not covered by the Financial Services Compensation Scheme (FSCS), which protects up to £85,000 ($117,000) of deposits if a firm fails.
Crypto industry reacts to Chase UK’s move
The crypto industry has expressed its disappointment and frustration over Chase UK’s move to block crypto payments, arguing that it is unfair and counterproductive. Some crypto advocates have accused the bank of being hypocritical, given that its parent company JPMorgan has been involved in several crypto-related initiatives, such as launching its own digital currency JPM Coin, offering crypto funds to wealthy clients, and partnering with Coinbase and Gemini as banking clients.
Others have pointed out that Chase UK’s ban will not stop customers from accessing cryptoassets through other means, such as using alternative banks or platforms that support crypto transactions. They have also urged the bank to reconsider its decision and work with the crypto industry to find solutions that can protect customers from frauds and scams without restricting their financial freedom and choice.
