Starling has prohibited its customers from receiving transfers from crypto merchants or purchasing cryptocurrencies using their bank cards.
The most recent financial institution to prohibit crypto-related transfers and activities for its cardholders is Starling, a digital bank based in the United Kingdom.
Customers of Starling will no longer be able to receive incoming transfers from crypto exchanges or merchants or purchase cryptocurrencies like Bitcoin BTCtickers down$16,543.
The online bank made the announcement via Twitter and a statement to customers, citing the perceived high risks associated with crypto trading.
Additionally, the financial institution referred to cryptocurrencies as “high risk and heavily used for criminal purposes.”
It was informed by a Starling spokesperson that the bank has had restrictions on cryptocurrency transactions of “varying degrees” for some time. The representative continued, “We recently tightened restrictions on inbound and outbound transactions by card and bank transfer.”
“We no longer support cryptocurrencies because they are currently high-risk and heavily used for criminal purposes, and the innovative technology and thinking behind them have great potential advantages.”
The bank’s measures come amid the ongoing industry scandal involving FTX, one of the largest crypto exchanges in the world, and Alameda, its sister company, for allegedly misappropriating user funds. The company owes more than $3 billion to its 50 largest creditors, according to the bankruptcy filing, and the total number of creditors reportedly exceeds 1 million investors.
Although banks’ restrictions on crypto activity may appear reasonable to some members of the crypto community, a blanket ban is not the best option.
In a tweet on Thursday, Sovryn BTC argued, “While it is understandable to block individual transactions that banks believe are outright fraud, banning legitimate transactions involving an entire industry is unacceptable. “The crypto enthusiast also inquired as to why banks are uninterested in numerous other risky customer transactions, such as stock trading and gambling.
Starling has previously imposed restrictions on activities related to cryptocurrency. Due to similar concerns, the bank temporarily stopped making payments to cryptocurrency exchanges in May 2021, citing “high levels of suspected financial crime with payments to some cryptocurrency exchanges. “About a month later, Starling resumed crypto exchange operations.
The block comes just a few weeks after Santander UK restricted customer deposits to cryptocurrency exchanges to 3,000 pounds ($3,588) per month and 1,000 pounds ($1,196) per transaction.
Various other English banks allegedly restricted crypto-related exchanges totally TSB bank prohibited its 5.4 million clients from purchasing Bitcoin in June last year. In 2018, credit card purchases of cryptocurrencies were reportedly banned by Lloyds, NatWest, and Virgin Money, among other major lenders.