Chase UK, JP Morgan’s British digital arm, has announced that it will stop facilitating payments to crypto companies starting next month, citing an increase in online fraud and scams.
Starting October 16, digital bank customers will not be able to transfer funds to crypto exchanges from a Chase account. In an email to customers, Chase explained that any attempts to make payments for crypto assets will be declined.
“To help you keep your money safe from frauds and scams, we’re changing the types of payments you can make from Chase.
“If we think you’re making a payment related 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.”
Chase explained that the move was made to protect clients and their funds, noting the increase in crypto fraud-related losses reported by U.K. regulators in the past year.
“We’ve seen an increase in the number of crypto scams targeting U.K. 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,” a Chase spokesperson told The Associated Press.
According to London-based law firm RPC, data from Britain’s fraud reporting agency Action Fraud show that losses from crypto scams reached an all-time high of £306 million ($372.3 million) last year, a surge of 41 percent from the previous year. When RPC shared their findings in May, they attributed this sudden rise to the November crash of cryptocurrency exchange FTC.
While crypto scam-related losses eased at the beginning of 2023, RPC partner Dan Wyatt and senior associate Christopher Whitehouse predict that crypto fraud will probably remain high in the foreseeable future. In an email retrieved by ABC News, they noted that while investors are becoming increasingly knowledgeable about scams, those scams are also becoming more cutting-edge, especially among scammers taking advantage of AI.
Chase UK isn’t the only bank that has changed its approach to cryptocurrency. It followed similar decisions by other banks that have changed their crypto policies over fraud concerns in recent years.
Earlier this year, Holdings Plc and Nationwide Building Society tightened limits on retail customers’ access to cryptoassets. In March, British bank NatWest set up daily and monthly limits on crypto trading at £1000 and £5000 (around $1200 and $6100), respectively. Spain’s Santander also announced it would block U.K. customers from making payments to crypto exchanges last year.
Wyatt and Whitehouse commented that more and more banks have prevented their clients from utilizing their accounts for cryptocurrency-related activities using various measurements.
“This action is publicly driven by a desire to help save customers from themselves — i.e. to make it harder for customers to participate in crypto markets and therefore less likely to fall victim to scams,” they wrote.
“But there is an equally important second driver — to reduce the risk to banks of their customers falling victim to scams and then looking to their banks for help and, potentially also, recompense.”
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