NatWest will limit the amount customers can transfer to crypto exchanges to £1,000 a day and £5,000 a month, which it said was to try and offer protection from scams.
“We know that customers investing their money in cryptocurrency has become extremely popular,” NatWest said, adding that it is “aware of the increasing risk posed by fraudsters”.
“As such, we have decided to take proportionate action to keep our customers safe and secure.”
Some £329mln was lost to crypto scams in the UK last year, up 72% on 2021, according to ActionFraud.
The bank’s head of fraud protection, Stuart Skinner said the promise of high returns often was what lured people into scams, with the heightened cost of living also playing a part by pushing customers to become more susceptible to such crimes.
By their very centralised nature, most cryptocurrencies are free from regulation in the UK, though the government announced in February it would look to tighten its grip on the sector in the coming months.
“As is common in emerging technology markets, the crypto sector continues to experience high levels of volatility and a number of recent failures have exposed […] structural vulnerability,” the Treasury said.
The move came after crypto exchange FTX dramatically collapsed in November, leading to speculation over the whereabouts of billions of dollars worth of assets.
NatWest also urged customers not to go through other bank accounts to invest large amounts in crypto, reiterating the risks and hinting other banks may “also restrict” payments, something Santander said it was considering last November.
It has faced backlash over the move though, with BitcoinPoint boss Benoit Marzouk claiming banks should be “educating users” rather than simply blocking payments.
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