Chase to ban crypto purchases over fraud fears
JPMorgan’s retail bank Chase is to ban cryptocurrency purchases to beat scams and fraudulent activity
Chase will stop customers buying cryptocurrencies from next month to combat rising numbers of criminals using digital assets to target victims.
The bank notified customers of its decision by email on Tuesday, with the ban coming into effect on 16 October.
The email said: “From 16 October 2023, if we think you’re making a payment relating to crypto assets, we’ll decline it. If you’d still like to invest in crypto assets, you can try using a different bank or provider instead – but please be cautious, as you may not be able to get the money back if the payment ends up being related to fraud or a scam.
“We’ve made this decision because fraudsters are increasingly using crypto assets to steal large sums of money from people. Declining these payments is one of the ways we’re helping to keep you and your money safe.”
According to Action Fraud, crypto-related fraud losses increased more than 40% in the year to March 2023. Other banks, including HSBC, Nationwide and NatWest, have set restrictions on their customers’ purchases for crypto, but outright bans are rare.
A statement from Chase said: “We’ve seen an increase in the number of crypto scams targeting UK consumers, so we have taken the decision to prevent the purchase of crypto assets on a Chase debit card or by transferring money to a crypto site from a Chase account.”
In March, NatWest set a daily limit of £1,000 and a 30-day payment limit of £5,000 to cryptocurrency exchanges “to help protect customers losing life changing sums of money”. The bank said men over 35 are most at risk due to them being more willing to take on risky investments.
A month earlier, HSBC announced that customers would no longer be able to buy cryptocurrencies with their credit cards. It also set limits of £2,500 for a single transaction and a total of £10,000 in any rolling 30-day period for crypto payments via online banking or debit card. TSB has blocked cryptocurrency transactions since 2021.
Cryptocurrencies are unregulated in the UK although regulators are assessing how best to oversee the asset class. New rules imposed by the Financial Conduct Authority will come into effect on 8 October, banning certain promotions such as ‘refer a friend’ deals.
However, there are those within the industry who are surprised by Chase’s blanket ban.
David Janczewski, CEO of Blockchain protection company, CoinCover said: “Our recent research highlights the issues some people have with cryptocurrencies and found that security risks are the second largest barrier to adoption behind volatility. Chase UK’s decision to blanket block crypto-related payments due to concerns about fraud and security is surprising.
“Whilst we respect the bank’s commitment to safeguarding its customers, there are other means to protect against scams and fraud. Instead of banning all crypto-related activity, which may ultimately cause customers to leave, it is possible to prevent theft and loss by introducing more robust safety measures which can tackle these issues at source.”