TSB, a British bank, is seeking to block 5.4 million of its clients from buying cryptocurrencies with their accounts.
The commercial lender is allegedly taking this action in response to growing worries about cryptocurrency exchange fraud, which exposes consumers to further losses. Kraken and Binance are two exchanges that the company is concerned about because of their “poor security standards,” which allow fraudsters to flourish.
TSB has warned its customers to be “extra vigilant” when it comes to dealing with crypto investment advisors. The bank, which has 536 branches across the United Kingdom, has identified instances of lax security that have allowed scammers to set up e-wallets and steal people’s money.
According to TSB research, one out of every eight bitcoin purchases is fraudulent. This is a considerably higher figure than is used in previous transactions. Scammers and fraudsters utilise these sites to dupe clients into giving them access to their accounts and taking their money.
The TSB is the most recent bank to take action against bitcoin exchanges. Other UK-based banks, including Barclays, Monzo, and Starling, prohibited bitcoin purchases in June for similar reasons. Users complained on social media at the time, claiming they couldn’t handle their money the way they wanted.
Learn more about how to start investing in the cryptocurrency market here.
Bank TSB has announced plans to block crypto purchases because it believes scammers are being allowed to set up e-wallets and steal people’s money. If enforced, the move will affect close to 5.4 million customers. The bank is particularly concerned about Binance, the world’s largest crypto exchange, which is registered in the Cayman Islands.
In the one month between March 15 and April 15, TSB Bank received 849 allegations of Binance fraud. Binance refused to cooperate when TSB sought to contact the exchange to fix the difficulties. Customers of TSB claimed to have lost money in the last 30 days, and the bank is awaiting Binance’s answer.
Binance has denied these accusations, stating that it takes “extremely seriously” its responsibilities for customer protection. It claims that the bank’s security staff never communicated with it. A spokesman for Binance said the exchange takes its responsibility to safeguard consumers against frauds extremely seriously. According to the firm, it has a long history of collaborating with police enforcement organisations.
Binance has had its fair share of legal issues, notably in the United Kingdom. The UK market authority is looking into the exchange for issuing unregistered tokens for its Coinbase and Tesla tokens. BaFin, the German market regulator, has also taken a look at these tokens, believing that they violate German securities rules. Binance is being investigated in the United States by the Commodity Futures Trading Commission (CFTC), the Internal Revenue Service (IRS), and the Department of Justice on suspicion of money laundering and tax evasion.
Kraken, the world’s largest euro-crypto exchange, has reacted to TSB’s allegations of fraud. According to the site, “for over 1,000 separate requests from law enforcement authorities” were received in 2020 alone. According to Jesse Powell, the company’s CEO and co-founder, it plans to go public in the next 18 months.
Kraken has refuted claims that it does not react to requests for help in cases of fraud. In the year 2020, Kraken replied to over 1,000 distinct inquiries from law enforcement authorities. Steven Christie, the exchange’s worldwide head of compliance, disputed the accusations. He went on to say that the exchange’s activities are following all regulatory and compliance standards.
The action comes just days after the UK’s Financial Conduct Authority (FCA) warned that most bitcoin investors were ignoring warnings and advice. Nearly 2.3 million individuals in the UK own cryptocurrency or have previously invested in it, yet only one in ten are aware of regulatory warnings about the hazards.
Customers will be prohibited from investing in cryptocurrencies, according to TSB. Throughout June, the bank has been outspoken about the links between cryptocurrency and fraud. The TSB’s Head of Fraud, Ashley Hart, has spoken out in papers and on the radio about the realities of crypto fraud. “Anyone persuaded to invest in cryptocurrencies should exercise great caution, as these attempts are nearly invariably fraudulent,” he said.
Bottom Line
As of now, cryptocurrency is still not banned in the UK. Investors are still free to trade and mine within the country, but it is advised for those active investors to be cautious as to not become a reason for other establishments to ban crypto usage. Users can protect themselves by securing their data and following regularisations. Crypto is becoming more popular than ever, it is dependant on each user how it’s going to be perceived in the future.
